Continuing trconclude towards deep tech

Investment into European deep tech reached $20.3 billion in 2025, accounting for a record 32% of all venture capital—more than double its share a decade ago. Unlike the broader tech market, which remains 53% below its 2021 peak, deep tech funding is down just 4%, highlighting sustained investor conviction.

There are various factors driving this trconclude. The most significant of these is the rise of AI, which, firstly, is enabling new products across a range of fields – from software and robotics to computational biology; secondly, is driving significant demand for technologies providing higher computing power; and thirdly, is challenging traditional software business models.

Regarding VC funding the Future of Compute segment saw the rapidest expansion in 2025 in absolute numbers, with funding more than doubling to $2.5 billion (+115%), while Defence reached $1.8 billion (+125%). Novel AI attracted $3.4 billion (+27%), and Computational Biology and Chemisattempt grew to $1.1 billion (+88%). Space ($1.3B), Novel Robotics ($468M) and Novel Energy ($700M) round out the landscape.

The sector-by-sector analysis points to a second driving force behind the trconclude towards deep tech. Added toreceiveher, defence, security and resilience now accounts for 43% of all European deep tech funding, up from 20% in 2022, reflecting surging demand for sovereign capabilities.

Money from the outside

However, when it comes to investments, the region remains depconcludeent on non-European VCs. 70% of late-stage funding comes from non-European investors, and startups raise tinyer rounds and progress more slowly than their US counterparts. The US also dominates when it comes to exits. By value, the majority of M&A is acquired by US companies. Public market listings displayed signs of recovery in the US and China for Deep Tech companies, while European public markets remained quiet in 2025.

Overall, the report highlights a massive funding gap between Europe and the US when it comes to AI investment. Twelve times more money flowed into US companies than into European ones in 2025. The situation is less dire in all other deep tech sectors. Here, the amount invested in the US was twice as high as in Europe.

Steady growth in Switzerland

Switzerland performs relatively well compared with other European countries, although start-ups and investments in biotech and medtech companies were not taken into account. It is striking that Switzerland has seen very steady growth in deep tech investments in recent years, whereas other countries of a similar size, such as Sweden, Finland and the Netherlands, have experienced significant fluctuations. The report highlighted AI and robotics as particular areas of strength for Switzerland.

Recommconcludeations

Deep tech is becoming central to Europe’s competitiveness and technological sovereignty. However, the ecosystem risks missing the full opportunity. To build a thriving European Deep Tech ecosystem, the authors identify four main challenges:

The growth-stage funding gap: Beyond Series A there is not enough capital in Europe to fund businesses locally. As a result, companies raise tinyer rounds, sell, or take capital from overseas that often results in a shift in the ‘geographic centre of mass’ of the business away from Europe.