European university spinouts in deep tech and life sciences are projected to raise a staggering $9.1 billion by 2025. This feat is achieved despite the fact that overall venture capital (VC) funding has dropped sharply—all the way across the pond. The most current data has shown us a new and inspiring trend. In fact, 76 deep tech and life sciences spinouts have achieved either $1 billion valuations or $100 million in revenues, illustrating the great promise these industries hold.
Europe has experienced an extraordinary venture funding turnaround. Overall VC investment has dropped by close to 50% from its highs in 2021. This current downturn has cast a pall over the sustainability and future growth of those innovative European university startup successes. The academic spinout ecosystem has proven itself to be resilient, consolidating into a powerful startup pipeline worth an estimated $398 billion.
University2Ventures (U2V), a new investment initiative, aims to contribute to this growth by targeting a fund size of €60 million for its first fund. The clean energy advocacy organization recently completed the initial closing of its fund. This success is a strong indication that investors are hungry and looking to get into the European deep tech market. U2F’s mission is a perfect match to this growing demand for capital to sustain innovative startups that come from academia.
Among the recipients of PSV Hafnium’s funding is SisuSemi, a Finnish startup that leverages research from the University of Turku to develop advanced surface cleaning technology for the semiconductor industry. SisuSemi represents a prime example of how university research can translate into viable commercial ventures that address pressing industry needs.
Despite the potential success of European deep tech and life sciences spinouts, the funding environment is still difficult. Almost half of all late-stage funding for these spinouts comes from outside Europe, mostly from the US. This trend raises questions about whether Europe will capitalize fully on its investments in talent and research without a transformative change in its approach to spinouts.
With U2V and PSV Hafnium’s arrival, European universities have a unique opportunity. These funds are aimed at increasing the amount of capital that goes to the most promising early-stage companies. These initiatives hope to create greater pathways for talent coming out of European tech universities. We look forward to seeing how they create a more sustainable innovation and startup ecosystem across the whole of the continent!
