Continued innovation in deep tech The share of investment allocated to European deep tech companies - an umbrella category for companies that apply breakthroughs in science and engineering to come up with novel products and services - reached a record-breaking 44% of total capital invested in 2023, up from just 15% of total investment volume a decade ago. Deep tech investment has, in fact, bucked the overall slowdown in absolute investment volumes in Europe. It looks set to surpass last year’s total, and is coming close to parity with the record sum invested in 2021. The biggest drivers of robust deep tech investment have been the tailwinds behind investment in break- through technology addressing the Carbon & Energy sector, and the strong trend of investment into European AI companies in 2023. The overall strength of deep tech investment re昀氀ects Europe’s solid bedrock of aca- demic and research institutions and its robust pool of technical talent. Amount of deep tech funding ($B) and share (%) of total European funding, 2014 to 2023 Total Deep Tech funding ($B) Share (%) of total 25 50 funding 20 40 ) S B h $ ( a r g e n i ( d 15 30 % n ) u f o f h t c o e t T a l p f e u e 10 20 n D d i Notes: l n a g t Data is as of 30 September o 2023. Excludes the T following: biotech, second- 5 10 ary transactions, debt, lending capital, and grants. All Dealroom.co data excludes Israel and the following: biotech, second- 0 0 ary transactions, debt, 7 1 4 5 6 1 8 9 0 2 E 1 1 1 0 1 1 2 2 2 3 lending capital, and grants. 0 20 20 2 20 20 0 20 0 2 Deep Tech companies have 2 2 2 20 an extended R&D phase and higher share of technical staff compared to conventional ventures. Sources: Deep Tech also often involves the development of hardware and/or IP. | 138