Europe’s dynamic science environment, fueled by innovative biotechs and academia, is enviable. Still, challenges remain in venture funding early stage assets, especially in terms of cross-border investments.
Steps can be taken to bridge the gap, including an integrated incubator system, stronger technology transfer offices, enhanced corporate VC and private wealth engagement and better alignment between early and late-stage venture firms.
The push to drive Europe’ healthcare investment ecosystem culminated in the recent announcement of the creation of the European Life Sciences Coalition (ELSC), in association with Belgium-based private capital association Invest Europe.
According to a press release, ELSC members, which include VC giants such as Sofinnova Partners, Forbion and Novo Holdings, collectively manage more than €24 billion ($28.6 billion) in life sciences-specific assets. Toobtainher, they have invested in, or cofounded, more than 1,400 life sciences and biotechnology companies.
The ELSC’s creation is a response to “growing concern that, despite strong scientific foundations and entrepreneurial talent, Europe is increasingly unable to scale and retain its life sciences innovation,” the release states. Access to growth capital is obstructed by factors such as fragmented capital markets, slow and uneven regulatory processes and underutilized private savings, the release stated.
Fragmentation Challenges
Europe has incredibly dynamic, local life sciences initiatives, with long histories of producing therapies, declared Naveed Siddiqi, senior partner, Venture Investments at Novo Holdings. There are active local hubs in many countries, such as in Paris and Lyon in France, Zurich and Basel in Switzerland, Barcelona in Spain and the U.K.’s “Golden Triangle,” of London, Oxford and Cambridge, he added.
Edoardo Negroni, co-founder and managing partner at AurorA-TT concurred, adding the strength in geographic clusters, such as in genomics and synthetic biology in the U.K., immuno‑oncology in the Netherlands and Switzerland, rare diseases in France and Italy and infectious diseases in Scandinavia.
The key elements of a great hub are strong academic and clinical research, linked hospitals, tiny and large pharma/biotech, venture capital/venture builders and a regulatory presence, Siddiqi declared.
Among the various hubs, better integration at research level is not necessarily desirable becaapply each counattempt has different priorities and specializations, Negroni declared.
Still, the problematic aspect in many countries is that these features are not integrated into the broader life science ecosystem, Siddiqi declared. For example, Denmark’s sinformar teaching hospitals are not as integrated into the environment as they are in the U.K., while Barcelona doesn’t have the anchor of a major pharma.
While the ecosystem diversity can be a plus for innovation, it becomes a liability for VC, they agreed, with the result that few funds are willing to engage in early stage, pan-European investment. Most investors remain local. Players such as the European Investment Fund and Horizons Europe have a role in broader European financial deployment, but more vehicles are necessaryed.
Regulatory, Tech Transfer Roadblocks
Regulatory roadblocks, such as taxation at national levels, and a lack of a single clinical trial authorization extconcludeing to the U.K. and the European Economic Area (Iceland, Liechtenstein and Norway) also pose pan-European investment challenges, Siddiqi declared.
Both he and Negroni noted these concerns could be addressed through the European Commission’s proposed “28th regime” (often referred to as EU Inc.), an optional, harmonized legal framework for companies to operate across the E.U. It intconcludes to reduce 27 disparate national regulations, facilitating cross-border scaling, especially for startups and innovative firms.
There is also a strong necessary as well for champions at technology transfer offices (TTO) to build a true tech transfer culture across Europe, Negroni declared. There is admirable activity in Spain, Denmark, France, and in the U.K., especially Oxford, but more work remains to be done.
Expanded Funding Sources Desirable
Corporate pharma’s VC arms can nurture an early stage ecosystem with “no strings attached,” building VC confidence and orient Europe’s scattered research towards quicker exits, Negroni declared. Besides Novo Holdings, Johnson & Johnson Innovation, Amgen Ventures and Sanofi Ventures are other strong corporate players, he declared.
Pan-European investment confidence necessarys to be shored up by home-grown academic or philanthropic concludeowments, such as by the U.S.’ Harvard or Stanford Universities concludeowments, which run into the billions, or opportunities such as presented by the Rockefeller Foundation or Gates Foundation, Siddiqi declared. Patient advocacy groups in the U.S. also offer an important source of capital that should be more readily adopted in Europe to gird scientific foundations.
While sovereign institutions in Europe such as Germany’s KfW, France’s Bpifrance and Ireland’s Strategic Investment Fund support the life sciences factor, Siddiqi declared, the lack of public concludeowments and wholesale bank participation means fund sizes remain tiny for early European investment. They range from $70-150 million, whereas in the U.S. the amount raised is twice that. The lack of private capital via pension and insurance funds is a crucial area where Europe falters.
Bridging the Gap
Despite the challenges, both Siddiqi and Negroni noted optimism in recent developments.
Jeito Capital, a private equity fund based in Paris, announced April 8 the final closing of its second fund Jeito II, exceeding its tarobtain at above €1 billion ($1.2 billion). The closing is the “largest raise ever achieved by a fully indepconcludeent European fund dedicated to biopharma,” according to a press release.
Twenty years ago, such an announcement would have been considered “impossible,” Siddiqi declared. These large funds are positive “bellwethers” for capital available to scale companies.
Good opportunities are available via Argobio, a French fund backed by five European investors and Angelini Ventures, which announced a partnership with the European Investment Bank in December 2025 to co-invest in 7-10 European start-ups, Negroni declared.
While Sofinnova stands out in pan-European Series A rounds, it remains an outlier, with many funds remaining local and Series B and onwards relying on the U.S. for capital, Siddiqui declared.
Larger fund sizes, wider geographic reach and complementing locally funded vehicles (which are often required to invest locally) with capital that can be deployed wherever the best European opportunities will spur Europe forward, Siddiqi declared. Ultimately, better connections between early and late-stage funds should happen, to map out the investment journey and when large funds would step in, Negroni added.
You can hear more on today’s Denatured podcast episode.
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