𝗕𝘂𝗶𝗹𝗱𝗶𝗻𝗴 𝗱𝗲𝗲𝗽𝘁𝗲𝗰𝗵 𝗴𝗶𝗮𝗻𝘁𝘀 𝗼𝘂𝘁 𝗼𝗳 𝗘𝘂𝗿𝗼𝗽𝗲

The argument centres on 𝘁𝗵𝗲 𝗴𝗿𝗼𝘄𝗶𝗻𝗴 𝗻𝘂𝗺𝗯𝗲𝗿 𝗼𝗳 𝗘𝘂𝗿𝗼𝗽𝗲𝗮𝗻 𝘀𝘁𝗮𝗿𝘁𝘂𝗽𝘀 𝘄𝗵𝗶𝗰𝗵 𝗮𝗿𝗲 𝘀𝗽𝗶𝗻-𝗼𝗳𝗳𝘀 𝗳𝗿𝗼𝗺 𝗽𝗮𝘀𝘁, 𝗽𝗿𝗼𝘃𝗲𝗻 𝘀𝘂𝗰𝗰𝗲𝘀𝘀𝗲𝘀. This is at the core of “Europe” becoming investable, including for US funds. Hopefully, European institutional investors (pension funds and insurance companies – which fund European VCs) will caught on soon enough.

Having said that 𝘁𝗵𝗲 𝗔𝗰𝗰𝗲𝗹 𝘁𝗮𝗯𝗹𝗲 𝗶𝘀 𝗮 𝗯𝗶𝘁 𝗱𝗲𝗳𝗹𝗮𝘁𝗶𝗻𝗴 𝗳𝗼𝗿 𝗱𝗲𝗲𝗽𝘁𝗲𝗰𝗵: of the 28 unicorns mentioned, only 5 can be classified as deeptech (Skype, Celonis, Babylon, Mellanox Technologies and Improbable), i.e. less than 20%. And in that list, one has gone bust (Baylon); another has a rather shaken history (the aptly named Improbable); and one is out of Israel (Mellanox), a market which has a completely dynamics compared to the mainstream European market (proximity to the US). So, one could argue that the success flywheel effect is demonstrably relevant for fintech, internet/ecommerce, advertising etc (all consumer-based industries) but hasn’t happened (yet) for European deeptech (more of a B2B market).

𝗥𝗲𝗰𝗲𝗻𝘁 𝗶𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁𝘀 𝗮𝗿𝗲 𝗵𝗼𝘄𝗲𝘃𝗲𝗿 𝗰𝗵𝗮𝗻𝗴𝗶𝗻𝗴 𝗳𝘂𝗻𝗱𝗮𝗺𝗲𝗻𝘁𝗮𝗹𝗹𝘆 𝘁𝗵𝗲 𝗘𝘂𝗿𝗼𝗽𝗲𝗮𝗻 𝗱𝗲𝗲𝗽𝘁𝗲𝗰𝗵 𝗹𝗮𝗻𝗱𝘀𝗰𝗮𝗽𝗲, particularly if we include (legitimately) AI as part of deeptech. European deeptech unicorns include:

👉 Foundational AI: Amilabs (alternative AI) ; Ineffable Intelligence; Mistral; Recursive Intelligence (all LLM models)
👉 Applied (or vertical) AI: Isomorphic Labs (drug discovery); Legora (legal); Lovable (coding)
👉 Unmanned vehicles: Helsing (drones); Quantum Systems (drones); Wayve (AV software)
👉 Robotics: NEURA Robotics (industrial robots surfing the humanoid craze)
👉 Quantum and energy: IQM Quantum Computers (QC); newcleo (SMR)

If all goes according to plan, 𝘁𝗵𝗲𝘀𝗲 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀 𝘄𝗶𝗹𝗹 𝗰𝗿𝗲𝗮𝘁𝗲 𝘀𝘂𝗽𝗲𝗿 𝗿𝗲𝘁𝘂𝗿𝗻𝘀 𝗳𝗼𝗿 𝘁𝗵𝗲𝗶𝗿 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀, who in turn will have the money, expertise, network and appetite to invest in more IP-based plays.

Shame that many of these companies are primarily-backed by US investors. There is however 𝗮 𝗴𝗿𝗼𝘄𝗶𝗻𝗴 𝗹𝗶𝘀𝘁 𝗼𝗳 𝗘𝘂𝗿𝗼𝗽𝗲𝗮𝗻 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀 𝗴𝗲𝘁𝘁𝗶𝗻𝗴 𝗶𝗻𝘃𝗼𝗹𝘃𝗲𝗱, such as Balderton Capital, Cathay Innovation, Hiro Capital, Noteus Partners or Prima Materia (Daniel Ek of Spotify fame). There are also the European investors who got in the action on US stocks and may now try their luck with European companies. European winners of the SpaceX IPO for instance include ACE Ventures, Hedosophia, Redstone VC, as well as a bunch of HNWIs or family offices.

Sources:
>https://www.accel.com/founder-factory
‍>https://pitchbook.com/news/articles/who-are-the-european-vcs-getting-a-slice-of-spacexs-record-ipo

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