Lakestar, Dealroom and Walden Catalyst Ventures publish European Deep Tech Report: 2023 Edition
This comprehensive study offers a detailed examination of the Deep Tech sector in Europe, including trending topics and advancements, as well as an examination of the hurdles and possibilities for European Deep Tech startups.
Steve Jacobs, Venture Partner & CPOChristina Franzeskides, Senior AssociateLukas Leitner, Associate
Under the backdrop of recent market turmoil, the report shows the strong growth and resilience of European Deep Tech. European Deep Tech startups raised $17.7 billion in 2022, 22% less than 2021, but still 60% more than in 2020. Deep Tech has been the second-best performing sector in Q3 and Q4 of 2022, with valuation dropping by 9% from 2021, but that pales in comparison to the 45% drop in the overall VC market.
“The approach and process used to invest in Deep Tech is often quite different from traditional SaaS investing”
Steven Jacobs, Venture Partner (Deep Tech) & Chief Product Officer at Lakestar, “The approach and process used to invest in Deep Tech is often quite different from traditional SaaS investing. It requires a unique investor skillset, a specialized bottom-up investment strategy and the ability to operate independently”
The report also notes that the key developing areas within Deep Tech have evolved. Some segments have progressed to the scaling and mainstream stages, while new areas are emerging and expanding the possibilities. The four main emerging segments of Deep Tech - Novel AI, Future of Computing, Novel Energy and Space Tech – raised $4.4B in 2022, the highest amount ever raised and over twice as much as what was raised in 2020.
The report recommends key steps to drive the expansion of Deep Tech, such as closing the funding gap between early-stage, specialized Deep Tech investors and general funds, and promoting diversity and inclusion.
“Last year, only 3% of VC funding in Deep Tech was invested in startups that were female-only founded”
Christina Franzeskides, Deep Tech Investor at Lakestar said, "More must be done to avoid unconscious bias. Last year only 3% of VC funding in Deep Tech was invested in startups that were female-only founded. However, diversity of thought, opinion and creativity is essential for our Deep Tech ecosystem to thrive. To that end, we must strive towards inclusivity, across all backgrounds and genders, for the space to reach its full potential."
Download the report