Ion Hauer, Principal at APEX Ventures, discusses how Europe’s Deep Tech Renaissance can bridge the innovation gap with Silicon Valley
As an early-stage deep tech investor, I am deeply optimistic about Europe’s burgeoning deep technology sector, which is undergoing a renaissance driven by world-class technical universities, a robust venture capital landscape, and increasingly supportive policy frameworks.
This transformation is particularly pronounced in fields such as quantum computing, advanced materials, industrial artificial intelligence (AI), and healthcare, where European institutions are leading both in research and commercialisation.
The European approach of patient capital and intensive R&D
Europe’s deep tech ecosystem is distinguished by its emphasis on patient capital, which is essential for technologies that require extended development periods before reaching the market.
Unlike Silicon Valley, where venture capital often fuels the rapid scaling of software and internet-based startups with shorter development cycles, Europe excels in nurturing future-oriented technologies such as quantum computing, advanced materials, and industrial AI.
These fields demand significant upfront investment and sustained research efforts, areas where Europe’s ecosystem is particularly strong.
For example, the European Tech Champions Initiative is set to invest €3.75 billion to mobilise at least €10 billion in late-stage capital for deep tech startups.
This commitment to patient capital ensures that promising technologies have the necessary runway to mature. Europe’s strength in intensive research and development (R&D) is further anchored by its prestigious technical universities, which serve as hubs for cutting-edge research and as incubators for startups, fostering a cycle of innovation and commercialisation.
Europe’s focus on hardware and complex, science-driven innovations fills a critical gap: foundational technologies that can be further developed and scaled by global tech hubs, creating a symbiotic relationship rather than a competitive one.
Universities driving innovation
ETH Zurich and the Technical University of Munich (TUM) are contributors to Europe’s deep tech renaissance, serving as engines of innovation and commercialisation. ETH Zurich has launched a total of 615 spin-off companies, with 530 of these still in business. TUM is also launching an average of 100 spin-offs every year.
In terms of quantum computing research, ETH Zurich’s Quantum Center and the ETHZ-PSI Quantum Computing Hub, are examples that explore both superconducting circuits and trapped-ion technologies. ETH’s work in advanced materials examines optical and transport properties through quantum effects, which has potential for applications in energy storage and electronics. These are examples of universities that produce groundbreaking research and cultivate a talent pool critical for the deep tech sector’s growth, ensuring a steady supply of skilled professionals.
From quantum to healthcare
Europe’s deep tech landscape is remarkably diverse, spanning transformative technologies across multiple sectors.
In quantum computing, European startups and research groups are pushing the boundaries of computational capabilities, with potential applications in drug discovery, logistics optimisation, and financial modeling.
In materials science, European researchers are developing next-generation materials with applications in energy storage, electronics, and sustainability.
Industrial AI is another area of excellence, leveraging Europe’s strong engineering and manufacturing base to optimise production processes, predictive maintenance, and supply chain management. TUM’s AI initiatives, such as the relAI collaboration with LMU, focus on reliable AI technologies for industrial applications.
In healthcare, deep tech is driving innovations in diagnostics, personalised medicine, and treatment modalities.
Europe’s deep tech ecosystem: Challenges and opportunities
Despite its strengths, Europe’s deep tech ecosystem faces significant challenges, including scale-up funding, talent acquisition, and market fragmentation.
Scale-up funding remains a critical hurdle, as deep tech ventures often require substantial capital to transition from research to commercialisation. The European Innovation Council (EIC) is addressing this gap, having supported approximately 500 startups with a total portfolio value of €70 billion.
Talent acquisition is another challenge, given the specialised skills required in deep tech fields. However, universities like ETH Zurich and TUM are producing a steady stream of graduates with expertise in quantum science, AI, and materials science.
Market fragmentation, resulting from Europe’s diverse regulatory environments and languages, can hinder the growth of deep tech companies.
However, cross-border collaborations and academic-industry partnerships are helping to mitigate this issue. Platforms like DeepTech Alliance connect startups with corporates and investors across Europe, assessing thousands of ventures annually to facilitate market and capital opportunities. These initiatives are forging a transatlantic innovation ecosystem, linking Europe’s strengths in long-horizon technologies with global commercialisation capabilities.
A complementary ecosystem
Despite these challenges, as an investor, I see immense potential in Europe’s deep tech ecosystem. Its ability to produce foundational technologies, coupled with growing financial backing and collaborative networks, positions it as a vital component of the global innovation landscape.
The real opportunity lies not in Europe replacing Silicon Valley, but in recognising how European deep tech fills critical gaps that the Valley cannot address alone. For investors willing to look beyond traditional tech hubs, Europe’s deep tech renaissance represents one of the most compelling investment theses of the next decade.
The most successful deep tech investments will be those that leverage Europe’s patient capital and R&D excellence as the foundation layer, with Silicon Valley’s commercialisation engine as the amplification layer.
