The 2026 European Deeptech Report, published by Lakestar, Walden Catalyst, and Dealroom, highlights a record surge in Europe’s deeptech ecosystem. VC-backed deeptech companies are now valued at $690 billion, with investment continuing to outperform the broader technology market.

Growth Factors

Deeptech is playing an increasingly important role in addressing global challenges, including climate, energy, defence, and productivity. Europe, supported by strong research capabilities and rising demand for sovereign technologies, hosts 30 per cent of the world’s leading deeptech universities and produces twice as many science and engineering graduates as the US.

Key Trends

Deeptech investment in Europe reached $20.3 billion in 2025, representing a record 32 per cent of total venture capital. The UK attracted the largest share of funding, followed by France and Germany, with Paris emerging as Europe’s leading deeptech hub. The Future of Compute segment recorded the fastest growth, while defence-related investment also increased significantly.

Challenges

A significant share of late-stage funding comes from non-European investors. Companies tend to raise smaller rounds and scale more slowly than their US counterparts, contributing to a persistent growth-stage funding gap. Many deeptech companies originate from research spinouts, particularly in photonics and quantum, while relatively few founders have prior startup experience.

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