WHITE PAPER. The 2023 European Deep Tech Report, a collaboration between Dealroom, Lakestar, and Walden Catalyst, delves into the dynamic landscape of deep technology within Europe. The report aims to provide a comprehensive analysis of emerging trends, key insights, and the evolution of deep tech startups and investments across various sectors.
From the perspective of the deep-tech opportunity in 2023, Europe possesses the key elements necessary to establish itself as a worldwide center of Deep Tech excellence. This includes robust foundational research, as exemplified by six schools*Â ranked among the top 20 globally for computer science.
Additionally, Europe boasts a highly educated talent pool, producing approximately 1.5 times more STEM graduates compared to the United States.
Moreover, there’s a surge in public support, demonstrated by initiatives such as the €1 billion NATO fund, SPRIND, and JEDI programs.
Notably, there’s widespread positive sentiment among citizens, with 90% of Europeans expressing a favorable view regarding the overall impact of science and technology.
Deep Tech is amongst the most resilient Venture capital categories with ~$15bn YTD 2023.
Deep Tech funding in 2023 remains consistent with that of 2022, whereas funding across the rest of European tech has notably decreased.
Source: The 2023 European Deep Tech Report
“Sweden has a strong tradition of innovation and has produced several successful tech companies and startups. Sweden has generally been supportive of deep tech investments and has recognized the importance of innovation and technology in driving economic growth, says Lotta Wessfeldt, COO Ideon Science Park. To maintain and advance our leading position, as a nation, Sweden needs to continue to invest in innovation. A new report from Swedish Incubators & Science Parks, states that we can create between 7,000 and 23,000 jobs in the next ten years and, in 20 years, contribute between 145 and 465 billion SEK to our GDP – if we manage the innovative culture correctly”.
“Sweden has a strong tradition of innovation and has produced several successful tech companies and startups. Sweden has generally been supportive of deep tech investments and has recognized the importance of innovation and technology in driving economic growth, says Lotta Wessfeldt, COO Ideon Science Park. To maintain and advance our leading position, as a nation, Sweden needs to continue to invest in innovation. A new report from Swedish Incubators & Science Parks, states that we can create between 7,000 and 23,000 jobs in the next ten years and, in 20 years, contribute between 145 and 465 billion SEK to our GDP – if we manage the innovative culture correctly”.Sweden ranks third in Europe in terms of venture capital funding. Sweden has also taken first place in Europe in terms of deep-tech focus funding, demonstrating the direction Sweden is taking to become one of the driving forces in Europe.
Source: The 2023 European Deep Tech Report
A position strengthened by Stockholm’s desire to become one of Europe’s top deep-tech hubs. With twice as much deep-tech venture capital investment as London and Paris in 2023, Stockholm stands out and shows its ambition for the years to come.
Source: The 2023 European Deep Tech Report
The report shows a record year for novel AI with +50% vs. 2022,
record year $1.3bn in funding (1.5x 2021) with the help of GenAI model builders such as Aleph Alpha (€110m Series B), Mistral ($113m seed funding), and autonomous driving companies such as Conigital ($400m Series A) and Oxa ($140m Series C).
2023 was another promising year, despite the decline in venture capital investment by European technology companies, with +10% vs. 2022 ($1.1bn vs. $900m) AR/VR: Aledia €120m Series D and Quantum: Pasqal €100m Series B.
Several significant challenges persist in Europe, including the need to incentivize more entrepreneurs to venture into Deep Tech, standardize terms for university spinouts, establish denser talent and excellence clusters, expand the base of limited partners (LPs), and enhance involvement from institutional investors.
Additionally, there’s a need to emphasize the role of governments and corporations as customers, fortify exit pathways, and advocate for diversity among both founders and investors.
Addressing these challenges requires a united effort from Europe, fostering a culture of “coopetition” where cooperation and competition intersect to drive progress and innovation.
Written by: Ugo Macalli, interning as a Marketing & Communication Coordinator Intern at Ideon Science Park, is from France. His major is Innovation Business Management and he did a Master’s degree in Innovation Management in France as well as a Business Administration Diploma in the US.
