Deep tech startups in Europe face a critical challenge to grow
European deep tech startups are at a historic moment.
In 2025, the sector raised an impressive €17.6 billion in funding, which represents nearly a third of all venture capital investment on the continent, according to data from The Recursive.
Numbers like that would be cause for pure celebration, right?
But the reality emerging behind the scenes of this ecosystem tells a slightly different story.
Even with capital available at near-record levels and a generation of technically brilliant founders, many of these companies simply stall after the early growth stages.
They reach a certain point and… stop.
It is not a lack of good ideas.
It is not a lack of money.
So what is going on?
That is exactly the question worth answering, and the data from the D2XCEL program, which supported more than 102 ventures across two cohorts, helps put this puzzle together with far more clarity than any generic theory about European innovation could offer.
There is a lot of interesting stuff here. 👇
What the D2XCEL data reveals about the European ecosystem
The D2XCEL program is not your typical accelerator. It was designed specifically for deep tech companies that have already passed the initial validation phase and need to make the next leap — that critical moment between having a working technology and building a business that actually scales.
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What the data collected across two cohorts shows is that this leap is being systematically underestimated by founders, investors, and even the national ecosystems that support these startups.
Most of the companies that went through the program arrived with solid technology, well-protected intellectual property, and even their first customers in the portfolio. The core problem was not technological. It was strategic, commercial, and often cultural.
Among the 102 ventures analyzed, a pattern repeated itself with striking frequency: teams had highly technical profiles, with PhDs and top-tier specialists, but lacked professionals with real experience in complex B2B sales, international channel development, and growth management in regulated markets. This created a silent bottleneck, because the company kept evolving technically while the commercial side fell behind. And in deep tech, where sales cycles can last months or even years, that imbalance takes a heavy toll sooner than you would expect.
Another point the data made crystal clear is that the funding available in the European ecosystem is still heavily concentrated in the early stages. There is relatively accessible capital for research, proofs of concept, and early investment rounds. What is scarce is growth capital — the kind aimed at the real scaling phase, when the company needs to hire aggressively, expand operations to other countries, and sustain long sales cycles without burning through its cash reserves.
Concrete results from the program and the numbers that matter
The numbers from D2XCEL tell a pretty revealing story about what happens when deep tech startups receive structured and targeted support.
Cohort 1 of the program raised more than €52 million in follow-on funding, while Cohort 2 was already showing early signs of traction with €12 million raised. Adding it all up, the companies that went through the program managed to raise more than €60 million in additional funding after joining D2XCEL.
And these results did not come out of nowhere. The program brought together 13 consortium partners from 8 European Union countries and involved more than 300 stakeholders in the venture support process.
As Denitsa Georgieva, Senior Manager of Innovation Programs at Tech Tour, the lead coordinator of D2XCEL, pointed out: scaling deep tech in Europe is a matter of coordinated ecosystem building. The idea is to provide tailored support for growth-stage startups, especially those in the Series A range and above, helping them tackle their current challenges, connect with the right investors, corporations, and partners, and turn innovation into real market traction.
In practice, the ventures that participated in the program had access to more than 485 mentoring sessions, ranging from one-on-one meetings to thematic sessions focused on areas like team development, intellectual property, value proposition, internationalization, and fundraising. On top of that, more than 30 in-person and online events were held to connect startups directly with investors and industry partners.
This integrated model helped startups move from fragmented exposure to earning recognized credibility within their sectors.
The visibility without validation trap
One of the most valuable insights that emerged from D2XCEL is about what we can call the visibility trap.
For many deep tech startups, gaining exposure is seen as a major milestone. Media coverage, event appearances, awards, and public recognition are often treated as clear signs of progress. And to some extent, that makes sense. Being seen is better than being invisible.
But in capital-intensive and heavily regulated sectors, visibility without validation rarely translates into real traction. Startups do not just need to be seen. They need to be seen by the right people: investors who understand long development cycles, corporations willing to pilot new technologies, and partners who can support entry into international markets.
Without those strategic connections, even the most promising technologies risk stagnating.
What the program showed is that growth was strongest when visibility was directly tied to measurable progress. We are talking about funding rounds, strategic partnerships, product validation, and market expansion. This shifts the communication from promotion to concrete proof of results.
Some ventures, instead of competing with each other, entered into collaborations with complementary industries. Others expanded their operations beyond European markets. That kind of outcome does not happen when the strategy is just to show up on yet another list of promising startups.
Scalability is not just a technology issue
When people talk about scalability in the context of deep tech, most immediately think of infrastructure, processing power, and system architecture that can handle growth. And yes, that matters. But what the European ecosystem is dealing with today goes far beyond the technical layer.
The scalability that is missing is business scalability — process scalability, organizational culture scalability, and the ability to execute commercially across multiple markets at the same time. And that is exactly where many European deep tech startups are stumbling in a systematic way.
One of the factors most frequently cited by the founders who went through D2XCEL is the difficulty of adapting a technology’s value proposition to different cultural and regulatory contexts within Europe itself. The continent, despite being an economic bloc, is deeply fragmented when it comes to markets. What works in Germany might not work in Spain. The procurement process at a large French company is completely different from that of a Nordic one. Navigating those differences while still building the product and trying to grow is, in practice, like playing multiple games at the same time with different rules for each one.
On top of that, there is a structural issue that many prefer not to talk about openly: the growth mindset within many deep tech teams is still heavily anchored in academic and research logic. This is not a criticism — it is an important observation. Founders who came from research environments tend to prioritize technical rigor, publishing results, and peer validation above everything else. That is excellent for building robust technology, but it can act as a brake when the company needs to make fast decisions, test commercial hypotheses with agility, and accept that an imperfect version of the product in the market is better than a perfect version that never reached the customer.
European fragmentation as a real barrier
Fragmentation — whether across markets, industries, or innovation networks — continues to be one of the biggest barriers to scaling deep tech in Europe. Founders need to navigate disconnected investor landscapes, complex regulatory environments, and limited international networks.
Pascal Ollivier, founding member of D2XCEL and president of Maritime Street, made a pretty direct analogy on this point: in the maritime and logistics sector, you do not move cargo without the right infrastructure. The same goes for deep tech ventures. D2XCEL built that infrastructure — the networks, the events, the trust-based relationships — so that promising technologies could actually move from the development stage to real-world implementation.
One striking data point is that among the 102 ventures supported by the program, only 10% came from the Central and Eastern European region, including countries like Poland, Hungary, Romania, Bulgaria, Cyprus, and Turkey. This shows that there is significant geographic concentration in access to this kind of structured support, which in itself is already an indicator of the fragmentation that runs through the European ecosystem as a whole.
The real difference shows up when visibility is targeted. Startups advance when they are positioned where real decisions happen: industry-specific events, investor forums, and strategic partnerships with corporations and public-sector players.
The role of ecosystems and what needs to change
European innovation ecosystems have come a long way over the past decade. Hubs like London, Berlin, Paris, Stockholm, and Lisbon have built impressive startup support infrastructures, with accelerators, investment funds, government programs, and connections to large corporations willing to test new technologies.
But D2XCEL showed that this ecosystem still has a significant blind spot: it is very good at creating and validating technology, but it has not yet developed efficient mechanisms to consistently and replicably turn that technology into globally competitive businesses.
Part of the problem lies in how funding is structured and distributed. European venture capital funds, broadly speaking, are still more risk-averse than their American or Asian counterparts. This means most of the available capital goes to companies that have already demonstrated clear traction, instead of betting on companies that are in the riskiest transition phase — which is exactly the moment when a deep tech startup needs robust and patient financial support the most.
The result is an extended valley of death that goes far beyond the traditional early-stage valley of death and stretches across a much longer period of the company’s growth.
Willem Bulthuis, founding member of D2XCEL and CEO of Corporate Ventures Advisory, summed up this issue well by stating that scaling deep tech requires more than capital. It takes structured support, strong networks, and continuous validation and challenging. Through mentoring, investor access, and cross-border collaboration, D2XCEL helped ventures move faster from technology development to market and investment readiness.
Three fronts of necessary evolution
What the D2XCEL data suggests, in very concrete terms, is that ecosystems need to evolve on at least three fronts for the next generation of European deep tech to truly scale:
- Bridges between research and market: creating more connections between research centers and commercial teams, encouraging the formation of founding teams with complementary profiles from the start. The gap between those who develop the technology and those who know how to sell it needs to be filled intentionally.
- Adapted funding instruments: developing funding mechanisms better suited to the reality of deep tech, with longer timelines, greater tolerance for extended development cycles, and active support for international expansion. Capital needs to be patient and strategic.
- A culture of iteration and learning: shaping the ecosystem culture so that failure and rapid iteration are seen as a natural part of the process, rather than red flags that scare off investors and partners. This is perhaps the hardest front to implement, but it is essential to unlocking the sector’s real potential.
Why this moment matters more than it seems
The €17.6 billion raised in 2025 is a powerful signal that the market believes in the potential of European deep tech startups. But capital alone has never been enough to build companies with global impact.
What will determine whether this generation of companies truly changes the game or ends up known as yet another wave of unfulfilled promises is the ecosystem’s ability to reorganize itself around real scaling needs — not just around the needs of technology creation and validation.
Europe has the talent, the technologies, and increasingly the capital. The missing piece is the infrastructure to bring all of that to market consistently. Building that infrastructure systematically and at scale is the challenge that will define the European tech sector over the next decade.
The D2XCEL program worked, in large part, because it created a space where founders could be honest about their struggles without the filter that usually exists when you are trying to raise investment or close a partnership. This generated genuine lessons that rarely show up in market reports or investor presentations.
And those lessons point to a clear path: the European ecosystem needs less ceremony and more practical, direct support for those who are actually trying to grow.
Scalability in deep tech is not a technical problem waiting for a technical solution. It is a systemic problem involving culture, capital, talent, and market structure. And until the continent addresses this problem with the same seriousness it gives to the scientific breakthroughs of the companies it is funding, the pattern will stay the same: world-class technology stalling before it reaches its real potential. 🚀
