Deep Tech innovations offer solutions to profound societal with significant investment potential. Investors are increasingly recognizing the outsized returns and resilience of Deep Tech ventures, making it a compelling focus for future growth.
Deep Tech spans a diverse range of eight investment themes: Novel AI, Future of Compute, Novel Energy, Space Tech, Robotics, Biotech/Foodtech/Agtech, Advanced Materials and Nanotechnology, and Defense Tech.
Investing in Deep Tech typically yields higher returns compared to traditional tech ventures, driven by factors such as the exceptional caliber of founders and significant barriers to entry. European venture capital funding for Deep Tech has seen a substantial increase, soaring from 10% in 2010 to 44% in 2023.
Despite these opportunities, European investors encounter challenges in scaling and exiting Deep Tech ventures, with a considerable share of opportunities captured by global investors and corporates. To navigate these challenges successfully, VCs must embrace new roles, strengthen ecosystem relationships, shift to a solution-oriented mindset, redefine success metrics, and capitalize on their inherent strengths.
Discover the potential of European Deep Tech.
Authors: The research was developed by Markus Berger-de León, a senior partner in McKinsey's Berlin office; Karel Dörner, a senior partner in the Munich office; Hannes Erntell, a senior partner in the Stockholm office; and Tobias Henz, a partner in the Munich office.
This publication is not intended to be used as the basis for trading in the shares of any company or for undertaking any other complex or significant financial transaction without consulting appropriate professional advisers.
