Academic spinouts in Europe have consolidated into a market worth $398 billion. A new report by Dealroom confirms that venture capital is increasingly targeting university research labs. Seventy-six deep tech and life sciences companies have now reached valuations of $1 billion or revenue of $100 million. Major examples include Iceye and Isar Aerospace.
Funding for these entities is defying the broader market slump. European spinouts are on track to raise $9.1 billion in 2025. This approaches an all-time high. In contrast the overall venture market in Europe is down nearly 50 percent from its peak in 2021. Two new funds launched this month to capitalize on this trend. PSV Hafnium closed a $71 million fund focused on Nordic deep tech. University2Ventures also completed a first close for a targeted fund of the same size.
The sector is delivering significant returns. Oxford Ionics was acquired by IonQ in 2025. This was one of six spinouts from Switzerland, Germany and the UK to exit for more than $1 billion this year. Drone manufacturer Quantum Systems is now valued above $3 billion.
One critical challenge remains for the sector. There is a shortage of local growth capital. The report notes that nearly 50 percent of late-stage funding comes from outside Europe. The majority of this capital originates from the United States. European firms are successfully incubating talent but continue to rely on foreign investment for scale.
