Understanding Deeptech: A Term in Flux
“Deeptech” is a term that’s increasingly used—but not consistently understood. In fact, the Dealroom 2025 European Deeptech Report names this as a core misconception: that deeptech is an undefined or overly broad concept. This ambiguity matters. For investors, startups, and policymakers alike, a shared understanding is critical for aligning capital, policy, and talent effectively.
For the purposes of this article, deeptech refers to scientific advancements or engineering breakthroughs tackling fundamental challenges through innovation in fields like artificial intelligence, quantum computing, photonics, biotech, or semiconductors. These ventures typically involve long development cycles, specialized talent, and significant upfront capital. They are often harder to build—but can also be the most transformative.
Venture capitalists are increasingly honing their investment strategies to capitalize on the most promising opportunities within Europe’s deeptech sector. While the continent benefits from world-class talent and leading research institutions, understanding where to deploy capital effectively—and how to navigate existing challenges—is key to unlocking deeptech’s full potential. Insights from recent discussions among top VCs, as highlighted in Vestbee’s article, reveal the emerging trends and strategic priorities shaping investment decisions today.
1. From Generic AI to Vertical AI: Depth Over Hype
The AI investment landscape is evolving. Investors are shifting focus from generic AI tools (like chatbots and API wrappers) to vertical AI solutions that address specific, complex problems in industries like healthcare, manufacturing, and legal tech. These models, built around domain-specific data and workflows, offer more defensible and commercially viable businesses.
Investors looking for sustained returns should prioritize opportunities where AI is integrated into industry-specific challenges, particularly in regulated or complex environments.
2. Europe’s Talent Strength: Addressing the Commercial and Diversity Gaps
Europe boasts exceptional scientific and engineering talent, with world-class universities and research institutions. However, a consistent theme raised by investors is the commercialization gap: many deeptech startups lack commercial expertise within their founding teams.
According to Atomico’s State of European Tech 2023, only around 20% of deeptech startups in Europe include a commercially experienced co-founder. This imbalance can slow down go-to-market strategies and limit scaling potential. Investors are increasingly prioritizing balanced teams—those combining strong technical backgrounds with sound business acumen and market insight.
A broader talent shift is also underway. As highlighted in the Supernovas Deeptech 2024 report, the share of deeptech startups with at least one female founder has more than doubled over the past decade—from 11.3% in 2011 to 24% in 2022. While gender diversity in the sector remains limited overall, this progress points to a slowly diversifying pipeline of deeptech leadership.
3. First-Mover Advantage in Emerging Frontiers
High-potential technologies like quantum computing, photonics, and semiconductors are gaining investor attention. While these areas require longer development horizons and higher capital intensity, they offer significant strategic value and potential for technological leadership.
Public support plays a critical role in enabling these frontiers. EU-level initiatives like Horizon Europe and the EU Chips Act are bolstering infrastructure and R&D funding. Meanwhile, the EIC Fund—the European Innovation Council’s dedicated investment vehicle—has become one of the most active deeptech investors in Europe, providing direct equity investment and co-investing alongside private capital. When paired with mechanisms like the EIC Accelerator, these initiatives help de-risk early-stage ventures and catalyze further private-sector involvement.
4. Deeptech Requires Patient, Mission-Aligned Capital
Deeptech ventures often necessitate longer development cycles and more upfront capital. VCs understand that returns may take 7–10 years or more, but the scale of impact can be transformative. Successful deeptech investors seek mission-driven teams with a clear, long-term vision and the ability to navigate complex roadmaps from research to product-market fit.
5. Ecosystem and Policy Alignment as Strategic Advantages
European deeptech startups are increasingly finding strength by aligning with national and EU-level programs. Initiatives such as the EIC Accelerator, Digital Europe, and Supernovas play a critical role in derisking early-stage innovation. Startups leveraging these ecosystems intelligently are more likely to attract co-investment, reduce burn during R&D phases, and gain early validation.
Innovation in Action: EIT-Supported Deeptech Ventures
Below, we spotlight two deeptech startups supported by EIT, sharing their founders’ perspectives and a glimpse into how each is turning cutting-edge research into viable, market-ready innovation.
RoboTwin
RoboTwin is leveraging AI, robotics, and digital twin technology to automate manufacturing operations. Supported by the EIT Supernovas network, the Czech startup exemplifies how vertical AI can solve complex, real-world challenges.
Co-Founder Megi Mejdrechova highlights the importance of mission-aligned backing and shares valuable insights:
“To make European manufacturing competitive, we need to innovate it, automate it, make it more efficient and sustainable, and face the lack of workforce and lack of skilled labor. We will achieve that, but only if we are mission-aligned. We, as tech startup founders, investors, and policy makers.”
What has been the biggest challenge in your development so far—and how have you navigated it?
Our method of easy robot teaching is groundbreaking. Such an innovation brought into industry as conservative as manufacturing does not happen without challenges. The positioning on the market and effort to achieve the highest possible user acceptance is something I did not anticipate would be so crucial. We have learnt quickly to build trust and respect by our users and partners through good knowledge of the manufacturing domain, the technology they are using, the processes they perform, and through empathy with their daily hurdles that we might not be able to solve all, but we come with an offer to significantly lower them and make the work more enjoyable.
How has support from EIT Supernovas (or the broader EIT ecosystem) helped you along your journey?
It helped in several ways. First of all, EIT introduced us to the ecosystem of innovation and startup when we were in the early ideation phase. Thanks to that we had a better understanding of what opportunities are out there, and how much bigger we should dream compared to what our ambitions were when we entered new into the game. The strength of the EIT ecosystem is in its diversity and specificity. We met throughout the journey many people who were able to understand our position and our needs – Czech based startup, female founded, deep-tech innovation for manufacturing. We got invitations to relevant industrial events, we got mentoring about fundraising, we got introduced to other startups focusing on similar markets to share and learn from each other. And the support evolves and transforms as we grow – from defining a suitable business model over closing our first round to scaling business internationally – we were always able to get relevant help and support.
What advice would you give to other deeptech founders looking to attract early investment?
To aim for a functional product early enough, and not to hesitate with it. It’s important to validate the product by its users and prove it solves an unmet need. It is also crucial to have references by first paying customers. To show you understand not only the tech but also the market and the end user. It’s not easy to shortcut the development phase but having an MVP and a plan how to iteratively extend and improve it, with the feedback from first users, was the way to go for us and it worked well.
How does RoboTwin’s technology go beyond standard AI to address specific industrial/logistics challenges?
We do automation the human-centric way and our product is designed such way too. Using it is straightforward, and users are empowered to control the results well by a few configuration steps. Our solution is not a black box, with a prompt in and a moving robot out. We understand the inevitability of integration with other existing, rigid and robust steps of the automation process, and therefore we make our product perfectly compatible with existing robots like ABB, FANUC, YASKAWA etc., the PLC control, MES systems etc.
Pack2Earth
Pack2Earth is an innovator in bio-based, home compostable materials for sustainable packaging and other industries —a clear example of deeptech applied to address the environmental and health issues caused by fossil-based plastic. Also supported through EIT, the startup represents the intersection of materials science, environmental & social impact, and market demand.
Françoise de Valera, co-founder & CEO at Pack2Earth shares a valuable insider view:
What makes your startup a “deeptech” company in your view?
Our start-up is deeptech because we rely on chemistry and biotechnology R&D to produce formulations, for which we then present patents. This means that we are using science to create innovation.
What has been the biggest challenge in your development so far—and how have you navigated it?
The biggest challenge so far has been raising investment, as EU investors like to follow the start-ups for a number of months before investing. They usually have slow decision-making processes, while start-ups typically have short runways. We were fortunate to find a German family office, JRV Holding, with a dynamic investment specialist and owner, who were able to step in quickly while others completed their analyses. They have invested 3 times in us in total already, proving to be the perfect shareholders to support us while we scale up our revenues.
How has support from EIT Supernovas (or the broader EIT ecosystem) helped you along your journey?
EIT Supernovas’ coach gave us excellent advice on improving our pitch deck which had already won competitions, so it was in good shape, yet they have helped us make it better still. They also gave us the opportunity to pitch to an array of suitable investors.
What advice would you give to other deeptech founders looking to attract early investment?
Never give up! If your idea is good, there is always a way.
How to Spot High-Potential Deeptech Opportunities
For seasoned investors, evaluating deeptech requires a nuanced approach. While products may be pre-market and development timelines extended, certain characteristics consistently indicate high-potential ventures:
- Technological Moat: A clearly articulated innovation protected by strong IP, novel research, or defensible infrastructure.
- Market Demand: Evidence of industry interest, such as pilot programs, strategic partnerships, or early traction.
- Balanced Teams: A blend of scientific/engineering credibility and commercial maturity.
- Milestone-Driven Roadmaps: Well-defined technical and regulatory milestones with capital mapped to each inflection point.
- Policy Alignment: Ventures that align with larger industrial, climate, or security initiatives attracting public-private capital.
In deeptech, timing and team dynamics are as critical as the technology itself. The most promising opportunities often emerge at the intersection of research, regulation, and market readiness.
Final Thoughts
Europe is well-positioned to lead the next generation of deeptech innovation. Success will depend not only on groundbreaking ideas but also on strategic execution and ecosystem collaboration. For investors and founders within the Supernovas network, this is the moment to delve deep, act boldly, and build with purpose.