Investors are being wooed by the promise of cutting-edge technology and science — and they’ve put billions behind so-called deeptech startups this year, working on everything from robots and drones to new materials and quantum computing.
Investors wrote €6.5bn worth of cheques for 488 deeptech deals so far in 2024, according to Sifted data (which excludes climate and healthtech startups).
In the last year or so, some VCs who were zeroed in on areas like crypto or ecommerce have started investing more in deeptech, notes Adam Niewinski, cofounder of deeptech VC OTB Ventures (of which the NATO Innovation Fund, or NIF, is an LP).
“Because of the very competitive nature of so many spaces [within SaaS] these days,” investors are “looking for things that have more edge, more defensibility,” Atomico partner Ben Blume recently told Sifted. “If you push more into deeptech, you inevitably see more of that, because there’s more IP in those businesses.”
Hot trends like defence and dual use technology, which are becoming less controversial in the wake of Russia’s war in Ukraine, have been catching investors’ eyes — and helping the likes of German AI defence tech startup Helsing raise a hefty €450m in July. Thanks in large part to that big deal, defence tech ranked the third best-funded subsector of deeptech so far in 2024, with €731m worth of deals (behind GenAI at €1.6bn, and autonomous mobility at €1.1bn, helped by British autonomous driving startup Wayve’s $1.05bn round), per Sifted data.
Defence is an area in which Andrea Traversone, managing partner of the NIF, tells Sifted he is seeing steady growth. Elsewhere in deeptech, he says he’s noticing particular momentum in space and semiconductors.
But deeptech isn’t without its struggles right now.
“There is still a shortage of ‘conviction’ in terms of lead investors” due to a “scarcity of experience and hence expertise in most sectors of deeptech,” Traversone argues.
OTB’s Niewinski adds that some of these newbie deeptech VCs “tend to favour early-stage opportunities and smaller investments, often lacking the patience required to support deep tech companies over the long term.”
Dealflow is strong for seed companies, he says, but has been “slower to pick up for Series A and later”.
But who is actively investing in deeptech so far in 2024? We turned to our deals tracker to see which investors made the most investments in the space so far this year through August 31. Sifted contacted all of the investors included to verify deal counts.
Most active investors
The European Innovation Council (EIC), which was created under the EU’s Horizon Europe programme and has a €10bn budget to invest in deeptech, topped the list of the most-active deeptech investors so far in 2024, with 28 deals in the space. EIC has been particularly active in the quantum space (with six deals), semiconductors and photonics (four deals), advanced materials (four deals) and spacetech (three deals). Its investments included GenAI and computer vision hardware startup Axelera AI’s $68m round and quantum software startup Multiverse Computing’s €25m Series A.
French state bank Bpifrance struck 19 deeptech deals thus far in 2024, across sectors including spacetech (three) and advanced materials (three) — among them was French OpenAI challenger Mistral’s big €468m fundraise.
Germany’s High-Tech Gründerfonds, a public-private investor focused on seed startups in areas like industrial tech and life sciences, invested in 15 deeptech startups so far this year. Deals included synthetic data cloud platform startup Sky Engine AI’s $7m round and Swiss 3D design startup Neural Concept’s $27m fundraise.
Investors with at least five deeptech investments in 2024 — tracked by Sifted — were asked to verify their activity to date this year between August 19-30. Deeptech does not include climate or healthtech startups, which are classed as two separate verticals. Early stage refers to funding rounds completed up to and including Series A, growth is Series B and C and late is Series D+. The data above can be downloaded as a CSV.
Who’s co-investing the most
French investors (and in particular, banks) have been teaming up the most to do deeptech deals this year. The most active co-investor was French state bank Bpifrance, co-investing in six deals with French bank BNP Paribas, including for fabless semiconductor startup SCALINX’s €34m January round and Mistral’s June round. The pair also partnered up with Crédit Agricole three times; and Bpifrance co-invested with Kima Ventures on three deals, including French small rocket launch startup Latitude’s $30m round in January.
EIC also partnered up with Bpifrance, VC fund Quantonation and Delft University of Technology spinout funder Delft Enterprises.
Who’s getting in on the biggest deals
UK-based autonomous driving startup Wayve took the cake as the biggest deeptech deal so far this year — raising a whopping $1.05bn from the likes of SoftBank, Nvidia and Microsoft.
Beyond that monster deal, US VCs dominated the cap tables of the other large deeptech rounds thus far in 2024, with General Catalyst leading Helsing’s Series C and Mistral’s Series B this year. Lightspeed Venture Partners also got in on the action in both of those deals; and BNP Paribas and Bpifrance also invested in Mistral’s round this year.
Index Ventures and US investment firm ICONIQ Capital backed German AI language startup DeepL in a €277m May round.
US VC Accel, Bpifrance, Eurazeo, Elaia Partners, Aglaé Ventures and Motier Ventures put money into French AI startup H for its massive $220m seed round in May; though three of H’s cofounders recently left the company.
Read the orginal article: https://sifted.eu/articles/most-active-investors-deeptech-2024/
