Top 15 Trends for Deeptech Startups in Europe in 2025

As Europe continues to bolster its position in the global innovation landscape, deeptech startups are at the forefront of driving technological advancements. By 2025, several trends are poised to shape this dynamic ecosystem, reflecting innovation in AI, hardware, quantum technologies, and sustainability. Here’s a detailed look at the Top 15 trends for deeptech startups in Europe in 2025.

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1. AI Domination Across Deep Tech

AI is becoming the backbone of various deeptech sectors, fueling growth and new business opportunities.

Data Point 1: AI is the key driver for growth across robotics, biotech, and semiconductors.
Source: Sifted
Data Point 2: Startups focused on AI receive valuations that are 2-3 times higher than their peers.
Data Point 3: Innovations powered by AI will expand into space analytics and defense technologies.
Data Point 4: The EIC allocated €250 million to fund generative AI initiatives in Europe.
Data Point 5: AI is reshaping global business models and consumer behavior across various sectors.
Source: Speedinvest

2. Increased Funding and Investment

A significant rise in investment and funding mechanisms is expected for deeptech startups in 2025.

Data Point 1: The EIC will invest €1.4 billion in deeptech for research and startups.
Source: EIC to invest €1.4 billion in deep tech in 2025
Data Point 2: This represents an increase of nearly €200 million from 2024.
Data Point 3: The EIC STEP Scale-up scheme will inject €300 million into companies with strategic technologies.
Data Point 4: In 2024, deep tech accounted for 33% of Europe’s investment portfolio—up from 17% in 2015.
Data Point 5: Investments will range from €10 million to €30 million per company under the EIC scheme.

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3. Consolidation Through M&A

Merger and acquisition activities are expected to accelerate as companies seek efficiency and scale.

Data Point 1: A significant wave of M&A is anticipated within the European deep tech landscape.
Source: Sifted
Data Point 2: The increase in M&A activity will be driven by stringent funding conditions and scaling difficulties.
Data Point 3: U.S. companies are likely to be major acquirers in the European market.
Data Point 4: AI, space tech, defense tech, and semiconductors will be hot areas for M&A deals.
Data Point 5: Tech-related M&A accounted for 18% of potential deals in 2024, indicating a trend towards growth through consolidation.

4. Focus on Hardware Startups

As software innovations mature, hardware startups are seeing an increase in funding and attention.

Data Point 1: VC funding for hardware startups is projected to double to 40% by 2025.
Source: Sifted
Data Point 2: Experts suggest that 60% of future tech revenue could derive from hardware-enabled innovations.
Data Point 3: This trend includes growth in semiconductors, industrial robotics, and defense technologies.
Data Point 4: The focus on semiconductors ties into Europe’s aim for technological sovereignty.
Data Point 5: Aid from AI advancements will lead to smarter industrial robotics.

5. Quantum Computing Commercialization

The commercialization of quantum computing technologies is gaining traction across the continent.

Data Point 1: Revenue from European quantum computing startups is expected to exceed €200 million by 2025.
Source: Sifted
Data Point 2: Applications demonstrating quantum advantages are becoming more practical.
Data Point 3: The competition to lead in quantum technologies is intensifying, with Europe at the forefront due to its strong talent pool.
Data Point 4: Europe enjoys a high concentration of expertise and research facilities focused on quantum technologies.
Data Point 5: Innovative startups are also creating quantum-safe encryption mechanisms.

6. Deep Tech Talent Initiative

The demand for skilled professionals in deep tech is prompting significant educational initiatives.

Data Point 1: The EIT aims to train one million individuals in deep tech fields by 2025.
Source: EIT HEI Initiative
Data Point 2: The initiative addresses the skill shortage in science, technology, engineering, and mathematics (STEM) with entrepreneurial training.
Data Point 3: As of September 2024, nearly 990,000 individuals had pledged to pursue training in deep tech.
Data Point 4: This push aims to retain high-growth companies in Europe by nurturing a local talent pool.
Data Point 5: The program enhances learning about advanced technologies and sustainable entrepreneurship.

7. EIC Challenges and Targeted Funding

The EIC is targeting specific emerging technologies with substantial financial backing.

Data Point 1: €120 million is earmarked for emerging sectors like autonomous robotics and climate-resilient crops.
Source: EIC to invest €1.4 billion in deep tech in 2025
Data Point 2: An additional €250 million will support early-stage companies, particularly in generative AI and new space technology.
Data Point 3: The EIC Work Programme 2025 will focus on schemes that assist founders and investors alike.
Data Point 4: The EIC Accelerator scheme is set to provide €634 million in funding for startups and SMEs.
Data Point 5: Grants and investment options will provide substantial financial support for innovative projects.

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8. Rise of Embodied AI

Embodied AI—where systems interact with the real world—promises significant advancements in various fields.

Data Point 1: The integration of multimodal data (text, audio, video) will become essential for AI development.
Source: Speedinvest
Data Point 2: This trend will lead to the development of adaptable and advanced AI models.
Data Point 3: Embodied AI will enhance robotics and automation applications across industries.
Data Point 4: Companies are increasingly leveraging AI to adapt their systems for better real-world interaction.
Data Point 5: Energy solutions like nuclear power are being explored to fully meet the demands of expansive data centers.

9. Deep Tech in Healthcare

The healthcare sector is experiencing a technological revolution driven by deep tech innovations.

Data Point 1: AI technologies are transforming treatment and diagnostics methods in healthcare.
Source: Substack
Data Point 2: Companies are now merging biology, AI, and research to develop personalized therapies.
Data Point 3: The growth of connected devices raises concerns regarding increased cyber vulnerabilities.
Data Point 4: Advancements in quantum models enable the design of novel pharmaceuticals.
Data Point 5: EIC funding is actively supporting medical diagnostic innovations, ensuring further industry growth.

10. Clean Energy and Sustainability

The emphasis on sustainability is driving innovation in clean energy solutions.

Data Point 1: Cleantech innovations are surging, focusing on sustainable practices and technologies.
Source: Substack
Data Point 2: Advances in hydrogen fuel cell technology are gaining significant traction.
Data Point 3: Development of solid-state batteries is underway to enhance energy density and safety measures.
Data Point 4: New public incentives fuel the startup ecosystem focused on renewable energy initiatives.
Data Point 5: The EIC STEP Scale-up scheme is honing in on investments toward clean technologies.

11. Space Technology

Innovations in space tech are set to attract investment and enhance European capabilities.

Data Point 1: Early-stage funding for space technology is emerging as a key focus area within the EIC.
Source: EIC to invest €1.4 billion in deep tech in 2025
Data Point 2: M&A activities within the space technology sector are anticipated to rise significantly.
Data Point 3: Innovative technologies for low Earth orbit satellites are a key development area.
Data Point 4: High-precision LiDAR systems for environmental monitoring are also under development.
Data Point 5: Flexible printed circuits are being advanced to enable improvements in space sub-systems.

12. Focus on Operational Efficiency

Startups are moving towards achieving greater operational rigor as the landscape evolves.

Data Point 1: Startups demonstrating strong unit economics and sustainable profit paths will emerge as favorites.
Source: SeedBlink
Data Point 2: Long-term resilience is gaining priority among investors over rapid scaling.
Data Point 3: There will be an emphasis on key performance indicators (KPIs), including churn and customer acquisition cost.
Data Point 4: Companies prioritizing operational efficiency tend to achieve higher valuations and better exit opportunities.
Data Point 5: Central and Eastern Europe is emerging as a hub for resilient startup developments.

13. Advanced Materials and Manufacturing

Innovations in materials science are fueling advancements in sustainable production methods.

Data Point 1: Increasing focus on sustainable electronics drives interest in advanced materials.
Source: Europe's technology trends for 2025
Data Point 2: Bio-based and low-impact materials are on the rise as industries seek greener alternatives.
Data Point 3: Development of ultra-thin 2D materials for power-efficient electronics is gaining momentum.
Data Point 4: Innovative computational approaches aim to discover next-gen materials.
Data Point 5: Research into thermal management solutions is underway, specifically for electric vehicles and data centers.

14. AI for Mobility

The integration of AI technologies is reshaping transportation and mobility solutions.

Data Point 1: AI’s influence on mobility solutions is accelerating, introducing new innovations.
Source: Tech.eu
Data Point 2: The electrification of transportation and enhancing EV infrastructure are key development areas.
Data Point 3: Battery upcycling processes are being prioritized to improve sustainability in transport.
Data Point 4: The EU has set ambitious goals for electric vehicle sales, targeting 80% by 2030.
Data Point 5: Investments in mobility tech will seek solutions that complement sustainability goals.

15. Digital Transformation across Industries

Across various sectors, companies are leveraging digital tools to enhance operational efficiency.

Data Point 1: The trend towards digitization is transforming manufacturing, retail, and service sectors.
Data Point 2: Incorporation of AI, IoT, and big data analytics is providing competitive advantages.
Data Point 3: Companies adopting digital strategies are seeing improved customer engagement and streamlined processes.
Data Point 4: The focus on sustainable practices is driving digital transformation efforts in numerous industries.
Data Point 5: Investments in digital infrastructure are expected to rise, reflecting the need for modern solutions.

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FAQ

Q: What is the role of AI in deep tech startups?

A: AI is the main driver for growth across deep tech sectors, enhancing fields such as robotics, biotech, and semiconductors. Learn more about AI's impact on deep tech.

Q: How is funding expected to change for deep tech startups in 2025?

A: The European Innovation Council is set to invest €1.4 billion in deep tech in 2025, reflecting a nearly €200 million increase from the previous year. Discover more on funding trends.

Q: What is expected to happen with M&A activity in deep tech?

A: There will be an increase in mergers and acquisitions activity in the European deep tech sector, driven by tight funding conditions and the need for scalability. Find out more about M&A trends.

Q: Why is there a growing focus on hardware startups?

A: The share of venture capital funding for hardware startups is projected to double to 40% by 2025, driven by the realization that a significant portion of future tech revenues will come from hardware innovations. Learn more about hardware trends.

Q: What is the future of quantum computing in Europe?

A: European quantum computing companies are expected to generate over €200 million in revenue by 2025, as they begin to show practical applications of quantum advantage. Explore quantum computing developments.

Q: What is the Deep Tech Talent Initiative?

A: The EIT aims to skill one million people in deep tech fields by 2025, focusing on developing a workforce capable of supporting high-growth companies in the technology sector. Read more about this initiative.

Q: What are EIC Challenges and Targeted Funding initiatives?

A: The EIC plans to invest significantly in emerging technologies across various sectors, allocating €120 million for innovations like autonomous robots and €250 million for early-stage companies in generative AI and agri-tech. Learn more about EIC funding efforts.

Q: What is the impact of embodied AI on the industry?

A: Embodied AI is shifting focus toward systems that interact with the real world, creating advanced AI models that enhance capabilities and drive innovation in fields like robotics and automation. Discover more about embodied AI.

Q: How is AI transforming healthcare?

A: AI is revolutionizing healthcare by enabling personalized therapies, improving diagnostics, and enhancing treatment methods, while also introducing challenges like increased cyber vulnerability. Read about AI's role in healthcare.

Q: What trends are emerging in clean energy and sustainability?

A: Innovations in clean energy, including advancements in hydrogen technology and solid-state batteries, are gaining momentum. Additionally, new subsidies in the U.S. and EU are expected to support startups focused on renewable energy. Find out more about clean energy trends.

About the Author

Violetta Bonenkamp, also known as MeanCEO, is an experienced startup founder with an impressive educational background including an MBA and four other higher education degrees. She has over 20 years of work experience across multiple countries, including 5 years as a solopreneur and serial entrepreneur.

Violetta is a true multiple specialist who has built expertise in Linguistics, Education, Business Management, Blockchain, Entrepreneurship, Intellectual Property, Game Design, AI, SEO, Digital Marketing, cyber security and zero code automations. Her extensive educational journey includes a Master of Arts in Linguistics and Education, an Advanced Master in Linguistics from Belgium (2006-2007), an MBA from Blekinge Institute of Technology in Sweden (2006-2008), and an Erasmus Mundus joint program European Master of Higher Education from universities in Norway, Finland, and Portugal (2009).

She is the founder of Fe/male Switch, a startup game that encourages women to enter STEM fields, and also leads CADChain, and multiple other projects like the Directory of 1,000 Startup Cities with a proprietary MeanCEO Index that ranks cities for female entrepreneurs. Violetta created the "gamepreneurship" methodology, which forms the scientific basis of her startup game. She also builds a lot of SEO tools for startups. Her achievements include being named one of the top 100 women in Europe by EU Startups in 2022 and being nominated for Impact Person of the year at the Dutch Blockchain Week. She is an author with Sifted and a speaker at different Universities. Recently she published a book on Startup Idea Validation the right way: from zero to first customers and beyond and launched a Directory of 1,500+ websites for startups to list themselves in order to gain traction and build backlinks.