{"id":681179,"date":"2025-07-23T18:20:16","date_gmt":"2025-07-23T15:20:16","guid":{"rendered":"https:\/\/buradabiliyorum.com\/en\/why-traditional-vc-is-failing-deep-tech-and-what-can-fix-it\/"},"modified":"2025-07-23T18:20:16","modified_gmt":"2025-07-23T15:20:16","slug":"why-traditional-vc-is-failing-deep-tech-and-what-can-fix-it","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/why-traditional-vc-is-failing-deep-tech-and-what-can-fix-it\/","title":{"rendered":"Why traditional VC is failing deep tech \u2014 and what can fix it"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a23a64ebf675\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a23a64ebf675\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/why-traditional-vc-is-failing-deep-tech-and-what-can-fix-it\/#Why_classic_VC_struggles_with_deep_tech\" >Why classic VC struggles with deep tech<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/why-traditional-vc-is-failing-deep-tech-and-what-can-fix-it\/#The_evidence_when_VC_fails_deep_tech\" >The evidence: when VC fails deep tech<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/why-traditional-vc-is-failing-deep-tech-and-what-can-fix-it\/#Prophesee_in_France\" >Prophesee in France<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/why-traditional-vc-is-failing-deep-tech-and-what-can-fix-it\/#Mycorena_in_Sweden\" >Mycorena in Sweden<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/why-traditional-vc-is-failing-deep-tech-and-what-can-fix-it\/#Blickfeld_in_Germany\" >Blickfeld in Germany<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/buradabiliyorum.com\/en\/why-traditional-vc-is-failing-deep-tech-and-what-can-fix-it\/#Whats_emerging_instead_new_investment_models\" >What\u2019s emerging instead: new investment models<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/buradabiliyorum.com\/en\/why-traditional-vc-is-failing-deep-tech-and-what-can-fix-it\/#The_missing_innovation_financial_tools_still_not_used\" >The missing innovation: financial tools still not used<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/buradabiliyorum.com\/en\/why-traditional-vc-is-failing-deep-tech-and-what-can-fix-it\/#Global_contrast_what_works_elsewhere\" >Global contrast: what works elsewhere<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/buradabiliyorum.com\/en\/why-traditional-vc-is-failing-deep-tech-and-what-can-fix-it\/#What_Europe_needs_to_change\" >What Europe needs to change<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/buradabiliyorum.com\/en\/why-traditional-vc-is-failing-deep-tech-and-what-can-fix-it\/#From_paradox_to_progress\" >From paradox to progress<\/a><\/li><\/ul><\/nav><\/div>\n<div id=\"article-main-content\">\n<p><span style=\"font-weight: 400;\">Europe\u2019s deep tech future hinges on evolving investment strategies. The reason for this is that traditional funding models cannot support the long-term financial commitments that innovation demands. There is a European paradox where, despite substantial scientific research, early commercialisation and a focus on shorter-term goals prevent the region from realising the full potential of deep tech. Although startups provide strong support, the sector still lags behind the US and Asia in bringing breakthroughs from the lab to market.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To maintain a competitive industry, Europe needs to advance technologies like AI, robotics, synthetic biology, and quantum computing, which are at the heart of the deep tech sector. These technologies aren\u2019t just profitable; they can transform the world, from cochlear implants restoring hearing to aerospace engineering enabling missions to Mars. But none of these advances h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>en without patient, long-term investment in <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/sciencee\/\" data-internallinksmanager029f6b8e52c=\"5\" title=\"Science\" target=\"_blank\" rel=\"noopener\">science<\/a>, engineering, and design.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Startups focused on rapid-deployment SaaS or consumer apps can commercialise quickly and attract early investment. Deep tech is different: there\u2019s a \u201c<a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/www.ideatovalue.com\/inno\/nickskillicorn\/2021\/05\/the-innovation-valley-of-death\/\" target=\"_blank\" rel=\"nofollow noopener\">valley of death<\/a>\u201d driven by long R&amp;D cycles, high upfront costs, and greater risk tolerance than in traditional software ventures.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It\u2019s worth examining which new funding models are working \u2014 and how they are starting to take hold in Europe. Drawing on insights from my investment practice \u2014 <\/span><a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/zubrcapital.com\/\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">Zubr Capital<\/span><\/a><span style=\"font-weight: 400;\">\u00a0\u2014 this analysis explores the real opportunity for Europe to leverage deep tech and reclaim lost market share, rather than see its startups move to mature financial ecosystems like the US, Asia, or Israel.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Why_classic_VC_struggles_with_deep_tech\"><\/span>Why classic VC struggles with deep tech<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Traditional software startups typically follow a familiar funding cycle blueprint. They raise a 10-year fund, deploy gained capital over three to five years, and aim for lucrative investment exits within five to seven years. The startup defines a successful funding cycle based on rapid growth, scalability, and relatively low capital requirements.<\/span><\/p>\n<div class=\"inarticle-wrapper latest channel-cta hs-embed-tnw\">\n<div id=\"hs-embed-tnw\" class=\"channel-cta-wrapper\">\n<div class=\"channel-cta-img\"><img decoding=\"async\" class=\"js-lazy\" src=\"https:\/\/s3.eu-west-1.amazonaws.com\/tnw.events\/hardfork-2018\/uploads\/visuals\/tnw-newsletter.png\"\/><\/div>\n<p><img decoding=\"async\" src=\"https:\/\/s3.eu-west-1.amazonaws.com\/tnw.events\/hardfork-2018\/uploads\/visuals\/tnw-newsletter.png\"\/><\/p>\n<div class=\"channel-cta-input\">\n<p class=\"channel-cta-title\">The \ud83d\udc9c of EU tech<\/p>\n<p class=\"channel-cta-tagline\">The latest rumblings from the EU tech scene, a story from our wise ol&#8217; founder Boris, and some questionable AI art. It&#8217;s free, every week, in your inbox. Sign up now!<\/p>\n<\/div>\n<\/div>\n<\/div>\n<p><span style=\"font-weight: 400;\">Deep tech cannot operate within this traditional financial mould. Startups operating in this category need development cycles that often exceed a decade. Regulations from sectors like healthcare, energy, and aerospace require numerous certifications and tests to verify advanced capabilities. That is an area where <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a>ist VCs rarely tread due to a need for patient capital.<\/span><\/p>\n<p>Most deep tech companies have to overcome specific industrial and geographical thresholds. A French aerospace firm, for instance, may not have the infrastructure to take advantage of traditional funding the way a US airline giant like Delta can.<\/p>\n<p><span style=\"font-weight: 400;\">Established investment models present several obstacles to deep tech companies. For example:<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\"\/><span style=\"font-weight: 400;\">Pressure for visible traction pushes startups to pivot from deep tech to commercial projects.<\/span><span style=\"font-weight: 400;\"\/><\/li>\n<li><span style=\"font-weight: 400;\">Traditional VCs often lack the expertise to evaluate complex projects properly.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Europe has smaller funds for upfront and long-term costs.<\/span><\/li>\n<li><span style=\"font-weight: 400;\"\/><span style=\"font-weight: 400;\">There is a valley of death for deep tech to cover R&amp;D from public funds.<\/span><span style=\"font-weight: 400;\"\/><\/li>\n<li><span style=\"font-weight: 400;\">EU investors tend to be risk-averse due to the stigma of failure.<\/span><span style=\"font-weight: 400;\"\/><\/li>\n<li><span style=\"font-weight: 400;\">Fragmentation within the industry, with multiple markets, regulations, and heavy bureaucracy, slows funding.<\/span><span style=\"font-weight: 400;\"\/><\/li>\n<li><span style=\"font-weight: 400;\">Foreign funding steps in for late-stage rounds, frequently taking the tech to other countries.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Another pain point in deep tech is the reliance on education. A traditional startup leader only has <\/span><a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/www.mckinsey.com\/capabilities\/mckinsey-digital\/our-insights\/european-deep-tech-what-investors-and-corporations-need-to-know\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">two to three years<\/span><\/a><span style=\"font-weight: 400;\"> of higher education. Deep tech requires about five to seven years due to the complexity of the subject matter. An overwhelming <\/span><a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/www.bcg.com\/publications\/2021\/overcoming-challenges-investing-in-digital-technology\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">81% of deep tech founders<\/span><\/a><span style=\"font-weight: 400;\"> believe European investors lack the knowledge to really understand the in-depth details of their projects or goals.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There also simply isn\u2019t enough money to offer. A European fund managing \u20ac150mn can write a few \u20ac10mn-\u20ac15mn checks, but that isn\u2019t enough to build something as complex as a gigafactory or scale a new fusion plant. The mismatch of traditional VC funding with deep tech in Europe is what drives systemic underfunding, stalled startups, and the loss of world-changing innovations. There is a <\/span><a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/www.wired.com\/story\/us-acquisitions-europe\/\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">history of outside<\/span><\/a><span style=\"font-weight: 400;\"> and foreign entities like Amazon, <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Facebook<\/a>, Microsoft, and others picking up European tech talent to integrate into their R&amp;D sectors. Such losses slow European deep tech advancement.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_evidence_when_VC_fails_deep_tech\"><\/span>The evidence: when VC fails deep tech<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The idea of mismatched VCs isn\u2019t theoretical. There are many real-world examples of funding failures leading to Europe losing deep tech opportunities to international competitors. Here are just a few examples.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Prophesee_in_France\"><\/span>Prophesee in France<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/www.prophesee.ai\/\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">Prophesee<\/span><\/a><span style=\"font-weight: 400;\"> creates neuromorphic vision sensors that enable machines to mimic human sight. The company raised \u20ac126mn over several rounds. However, in October of 2024, Prophesee entered judicial recovery after failing to secure additional funding. Even though the startup received massive global recognition for its technical validation (proof of concept), the length and uncertainty of financing led to complications in development.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Mycorena_in_Sweden\"><\/span>Mycorena in Sweden<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Mycorena had to file for bankruptcy and is <\/span><a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/www.greenqueen.com.hk\/mycorena-ceo-mycoprotein-fat-bankruptcy-investors-consortium\/\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">now permanently<\/span><\/a><span style=\"font-weight: 400;\"> closed. What began with the promise of mycelium-based protein that could be used in all kinds of industries failed after the startup couldn\u2019t secure <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/watch-movies-tv-seriess\/\" data-internallinksmanager029f6b8e52c=\"8\" title=\"Watch Movies &amp; TV Series\" target=\"_blank\" rel=\"noopener\">Series<\/a> B funding in the mid-2020s. Mycorena was ultimately acquired for next to nothing, underscoring the hurdles deep tech companies encounter during scale-up.\u00a0<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Blickfeld_in_Germany\"><\/span>Blickfeld in Germany<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/www.blickfeld.com\/\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">Blickfeld<\/span><\/a><span style=\"font-weight: 400;\"> was an emerging leader in LiDAR, which enables autonomous vehicles to perceive their environment and operate safely.<\/span> <span style=\"font-weight: 400;\">The company raised a total of \u20ac68mn \u2014 including \u20ac15mn from the European Investment Bank (EIB). But in June 2024, Blickfeld had to file for insolvency. Revenue came in too slowly to meet the demands of patient capital.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are many other examples of investment shortcomings undermining promising European tech firms.\u00a0 Take MaaS Global in Finland, best known for the Whim app, which burnt <\/span><a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/www.fleeteurope.com\/en\/maas\/europe\/features\/umob-acquires-bankrupt-maas-global\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">through too much capital<\/span><\/a><span style=\"font-weight: 400;\"> without a sustainable business model. Or Sweden\u2019s Northvolt, whose battery <\/span><span style=\"font-weight: 400;\">manufacturing business failed<\/span><span style=\"font-weight: 400;\"> even with a blended funding model. The pattern is strikingly consistent: funding dries up when capital needs spike and investors push for exits while R&amp;D is still trying to work out the final solution. Meanwhile, public funding fails to arrive in time, and technical ambition is quickly sacrificed on the altar of short-term vitality. History is repeating itself, and deep tech is losing out.<\/span><\/p>\n<figure class=\"post-image post-mediaBleed aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-1395864 js-lazy\" alt=\"northvolt-ett-gigafactory-sweden\" width=\"1500\" height=\"844\" src=\"https:\/\/cdn0.tnwcdn.com\/wp-content\/blogs.dir\/1\/files\/2023\/04\/northvolt-ett-gigafactory-sweden.jpg\"\/><figcaption>Northvolt\u2019s flagship gigafactory went into hibernation after financial troubles caused the company\u2019s collapse. Credit: Northvolt<\/figcaption><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-1395864\" src=\"https:\/\/cdn0.tnwcdn.com\/wp-content\/blogs.dir\/1\/files\/2023\/04\/northvolt-ett-gigafactory-sweden.jpg\" alt=\"northvolt-ett-gigafactory-sweden\" width=\"1500\" height=\"844\" srcset=\"\"\/><\/figure>\n<h2><span class=\"ez-toc-section\" id=\"Whats_emerging_instead_new_investment_models\"><\/span>What\u2019s emerging instead: new investment models<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">For Europe to capitalise on deep tech, change must happen \u2014\u00a0and happen fast. New funding models and structures are required to meet the sector\u2019s needs. Alternative solutions could be the final leg of the journey to overcome issues like the \u201cvalley of death\u201d for deep tech. Which funding initiatives will get us there?<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\"\/><b>Government-backed and hybrid schemes:<\/b><span style=\"font-weight: 400;\"> We need to replicate the EIC\u2019s investment strategy of grants, equity, and hybrid investments. The EIC Accelerators, for example, offer up to<\/span><a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/corpowerocean.com\/corpower-ocean-awarded-up-to-e17-5-million-in-eic-accelerator\/\" target=\"_blank\" rel=\"nofollow noopener\"> <span style=\"font-weight: 400;\">\u20ac17.5mn<\/span><\/a><span style=\"font-weight: 400;\"> per company, and the new STEP Scale-up Scheme targets growth rounds of \u20ac10mn-\u20ac30mn. Government-backed funds, such as Bpifrance and the German Zukunftsfonds, meanwhile, can help de-risk early innovation and fill funding gaps for deep tech.<\/span><span style=\"font-weight: 400;\">\u00a0 <\/span><\/li>\n<li><b>Public-private partnerships:<\/b><span style=\"font-weight: 400;\"> Pooling resources is an important way to fund deep tech. When state, corporate, and private investors work together, they naturally expand the usable timeline of a development group, boosting financial support for proofs of concept and market launches.<\/span><\/li>\n<li><span style=\"font-weight: 400;\"\/><b>Corporate Venture Capital (CVC):<\/b><span style=\"font-weight: 400;\"> The strategic investment arms of companies like Volkswagen, Airbus, Siemens, and Bosch help fund deep tech. Not only do they offer financial support, but they also tend to have technical expertise and access to advanced equipment that can bring the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> to life. Lilium is a good example. The German eVTOL startup secured funding from grants and private players, having received <\/span><a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/www.electrive.com\/2025\/01\/03\/new-investor-consortium-to-fund-lilium-with-e200-million\/\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">\u20ac200mn<\/span><\/a><span style=\"font-weight: 400;\"> from the Mobile Uplift Consortium.<\/span><\/li>\n<li><span style=\"font-weight: 400;\"\/><b>Family offices and alternative private investors:<\/b><span style=\"font-weight: 400;\"> Private wealth has also entered the deep tech space. Family offices like Str\u00fcngmann Brothers (BioNTech) can back companies from inception to scale. These entities are less constrained by traditional fund structures, allowing greater investment impact with stronger strategic alignment for the long term.<\/span><\/li>\n<li><span style=\"font-weight: 400;\"\/><b>Venture studios and university-linked funds:<\/b><span style=\"font-weight: 400;\"> Deep tech venture studio ecosystems can ensure research from universities makes the leap to scalable businesses. Initiatives such as Fraunhofer Ventures in Germany, CERN Venture Connect in Switzerland, and Creative Destruction Lab in Oxford illustrate this approach. Another good example is Evergreen Capital Vehicles, which helps nurture science spinouts before they transition into commercially focused entities.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">It is important to note that these funding models alone are still not enough. They help create vibrant, regional successes, but the fragmentation of industries leaves infrastructure gaps in different European countries. The concentration of sectors like aerospace in Germany, batteries in Sweden, and EIT deep tech talent in Spain only widens such gaps. Progress is encouraging, but geographical coverage must be balanced to overcome Europe\u2019s \u201cpatchwork\u201d of financial inefficiencies.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_missing_innovation_financial_tools_still_not_used\"><\/span>The missing innovation: financial tools still not used<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Despite all these progressive financial models, truly innovative financial solutions remain largely absent from the deep tech ecosystem in Europe. Many think tanks, EU policy papers, and founder forums highlight the need for longer time-to-revenue projects and solutions to high upfront costs, but the current tools are not quite up to the task.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As of 2022, no European deep tech startup has successfully used IP-backed loans, R&amp;D pre-purchase agreements, revenue-based financing, or advance market commitments. Such models are helpful but have yet to tackle the challenges around scaling a business, time to market, and elevated risk profiles.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The dominance of traditional financial models exists because grants, equity rounds, and hybrid public-private schemes can\u2019t account for regulatory uncertainty, lack of institutional experience, and risk aversion.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As a result, Europe is falling behind and will continue to do so until financial innovation moves from theoretical idea to practical application. The good <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> is that such adaptation is already happening elsewhere, providing a framework for Europe to follow.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Global_contrast_what_works_elsewhere\"><\/span>Global contrast: what works elsewhere<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The US and Israel are turning deep tech into operational success using practical funding tools. Take Helion Energy in the US. The company has developed advanced fusion systems and recently raised<\/span><a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/newatlas.com\/energy\/helion-1-billion-3-years-fusion-clean-energy\/\" target=\"_blank\" rel=\"nofollow noopener\"> <span style=\"font-weight: 400;\">$425mn<\/span><\/a><span style=\"font-weight: 400;\"> to advance this technology over the next three years. Funding milestones were introduced to de-risk capital and support pre-purchase contracts.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Another example of adaptive funding fuelling deep tech success is Climeworks. The company has benefited from revenue-based financing through corporate carbon offset agreements. Thanks to the predictable revenue streams, investors like Microsoft and <\/span><a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/climeworks.com\/news\/how-businesses-can-help-reverse-climate-change-stripe\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">Stripe<\/span><\/a><span style=\"font-weight: 400;\"> have been able to provide funding crucial for scaling Climeworks\u2019 direct air capture technology.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Innovative funding has also boosted Israel\u2019s Phantom Energy. The company is using IP-backed loans to enable prototyping without dilution, leveraging patents as collateral. In every case, the funding tool is designed to \u201cmatch\u201d the technology. Europe can learn from these successes. With flexible funding that accommodates longer development cycles and eases failure risks, the continent will progress further in deep tech.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_Europe_needs_to_change\"><\/span>What Europe needs to change<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">If Europe wants a seat at the deep tech table, it needs to change. Incremental steps, like the examples listed above, won\u2019t be enough. Insufficient patient capital with too many funds operating on short, exit-driven cycles must give way to new models. In their place, we need pan-European \u201cevergreen\u201d funds, growth-stage vehicles, and public-private platforms.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Fund sizes remain too small, and financial innovation is lacking. To address this, Europe needs well-publicised pilot projects involving creative investment models, such as IP-backed finance and non-dilutive hybrid modelling.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If Europe fosters greater collaboration and co-investment, we can reduce fragmentation and harmonise regulations. This could speed up grant distribution and create international \u201cfast lanes\u201d that shift the culture from fearing risk to celebrating experimentation.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Bold action is necessary to streamline bureaucracy and build technical investing talent that feeds both VCs and deep tech startups. We must change the culture. The deep tech investment ecosystem urgently needs to adapt to unlock the sector\u2019s potential.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"From_paradox_to_progress\"><\/span>From paradox to progress<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Europe has a world-class science community and a vibrant startup scene. To ensure success and stop promising projects from moving abroad, direct action is needed to scale deep tech ventures and address structural funding gaps.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The classic venture capital solution doesn\u2019t fit the deep tech sector. While new models and regional initiatives are emerging and achieving some success, critical pieces are still missing, especially in late-stage capital and financial innovation.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Europe must seize this pivotal moment to reshape its capital stack into one of patience, scale, and flexibility. That will foster resilient, world-leading companies. But it will take the collective work of policymakers, investors, and founders to move beyond theory and into actionable success.\u00a0<\/span><\/p>\n<\/p><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMN63nwsw68G3Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more like this article, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" target=\"_blank\" >Technology category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/thenextweb.com\/news\/vc-funding-european-deep-tech-challenges-and-solutions\" target=\"_blank\" >Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Europe\u2019s deep tech future hinges on evolving investment strategies. The reason for this is that traditional funding models cannot support the long-term financial commitments that innovation demands. There is a European paradox where, despite substantial scientific research, early commercialisation and a focus on shorter-term goals prevent the region from realising the full potential of deep&#8230;<\/p>\n","protected":false},"author":1,"featured_media":681180,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/cdn0.tnwcdn.com\/wp-content\/blogs.dir\/1\/files\/placeholder-bg-1.png","fifu_image_alt":"","footnotes":""},"categories":[18],"tags":[],"class_list":["post-681179","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/681179","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=681179"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/681179\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/681180"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=681179"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=681179"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=681179"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}