Europe’s Deep Tech Promise Needs Bold Capital

The newly published TUM Deep Tech Report delivers a sobering reality check for Europe’s innovation ecosystem – and a clear call to action for investors like us.

An article by Gregor Haidl, Partner and Head of HTGF Munich and one of the co-authors of the Global Deep Tech Report 2026.

The data speaks volumes: Europe hosts 45% of global Deep Tech startups but captures only 17% of funding. Germany, despite its economic weight, ranks fifth globally with just 500 startups – behind the UK (1,100) and France (800). Most striking: Europe’s Series A to Series B conversion rate sits at a mere 10%, compared to North America’s 24%.

Understanding the Deep Tech Founder Profile

European founders aren’t lacking in scientific depth or technical excellence. In fact, 61% of Deep Tech founders hold Master’s or PhD degrees, with Engineering, IT, and Management being the top educational fields. This highlights the foundational role of advanced education in building ventures rooted in frontier science and engineering. However, the report also indicates that European Deep Tech founders, while highly educated, trail their North American peers in prior founding experience (36% vs 43%), prior Deep Tech experience (24% vs 33%), and top-10 university attendance (14% vs 29%). This suggests a unique founder landscape in Europe that demands a tailored support system, recognizing and nurturing the deep scientific talent available as well as encouraging entrepreneurial experiences.

At HTGF, we’ve always believed that backing Deep Tech does take early conviction first and foremost, when technologies are still unproven. However, the report shows that patience, when timelines extend, and follow-through when scale-up capital is needed most, are even more important. As a multi-stage platform from seed to growth, we’re building towards exactly this kind of commitment.

The report confirms what we see daily: the “Valley of Death” is real, and over 90% of Deep Tech startups fail due to funding gaps – not technology failures. Hybrid financing models combining equity, grants, and debt are needed.

This challenge is further compounded by critical disparities in exit opportunities and the ability to scale. North America’s M&A exit rate stands at 8%, double Europe’s 4%. This “scaling bottleneck,” where 81% of European startups remain at or below 50 employees compared to 68% in North America, points to a systemic issue in providing clear pathways to successful exits for Deep Tech ventures. Addressing this requires not only strategic deployment of capital but also fostering a more robust ecosystem to support scale-ups and enable large acquisitions.

Europe’s Deep Tech could generate €1 trillion in enterprise value and up to 1 million jobs by 2030. But only if we fundamentally rethink how we deploy capital. We need more investors who understand that Deep Tech isn’t a sprint – it’s an ultramarathon requiring endurance, trust, and the willingness to build category-defining companies over decades.

The New Wirtschaftswunder requires bold capital that aligns with bold founders.

download the report