Universities and research institutes have long been the repositories of deep technology in Europe. Academic spinouts are now being consolidated into robust startup funnels worth $398 billion, and VC funding is following suit.
According to Dealroom's European Spinout Report 2025, 76 of these deep tech and life sciences companies have reached valuations of $1 billion, revenues of $100 million, or both. These include unicorns such as Iceeye, IQM, Isar Aerospace, Synthesia and Tekever, which are now increasing their funding to support university spin-outs.
Just this month, two new funds were launched to provide more funding for talent coming out of Europe's technical universities and add breadth to a pipeline currently headed by Cambridge, Oxford and ETH Zurich.
Denmark's PSV Hafnium recently closed its first fund with an oversubscription of €60 million (approximately $71 million), focusing on Nordic deep technology. U2V (University2Ventures), which has offices in Aachen as well as Berlin and London, is targeting the same amount for its first fund and recently completed its first closing.
The two newcomers join a growing ranks of European venture firms with university spinouts at the heart of their investment thesis. Pioneered by the likes of Cambridge Innovation Capital and Oxford Science Enterprises, it is now fully mature and the category is also diversifying.
While it still largely consists of funds backed by one or more universities or research institutes, it now also includes independent companies that see spin-outs simply as potential capital collectors, and rightly so. Oxford Ionics, which was acquired by US-based IonQ, is one of six Swiss, British and German spin-out companies that provided investors with exits of more than $1 billion in 2025.
These exits are accompanied by an increase in the amount raised. European deep tech and life sciences spinouts are on track to raise a near-record $9.1 billion in 2025, according to Dealroom. This is in contrast to VC funding across Europe, which is down nearly 50% from its 2021 peak.
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The large round, completed in 2025, reflects an appetite for spinouts in a variety of areas, including nuclear energy (Proxima Fusion) and dual-purpose drones (Quantum Systems), currently valued at more than $3 billion. These startups often leverage research from specialized laboratories, which also explains why there is a long tail of European locations that can generate spin-outs.
Building relationships with non-Oxbridge hubs and key countries can also be a way for new entrants to differentiate themselves and find deals. “Nordic research institutions have extraordinary untapped potential,” said the PSV Hafnium partners in a press release.
PSV Hafnium itself is a spin-out from the Danish Technical University (DTU), but it also has early-stage investments in other Nordic countries. One of the nine checks so far went to SisuSemi, a Finnish startup that leverages 10 years of research at the University of Turku to bring new surface cleaning technology to the semiconductor industry.
The availability of more funding is good news for teams like SisuSemi. It also contributes to an encouraging environment for spin-outs in Europe, in addition to subsidies, commercialization support and improved trading conditions. However, one problem remains: growth capital.
As the report's authors point out, this gap is “not a spin-out-specific trend, but one that affects the European startup ecosystem as a whole.” Still, it is very impressive that almost 50% of late-stage funding for deep tech and life sciences spinouts in Europe comes from outside Europe, primarily from the US.
This proportion has been decreasing over the years, but unless it changes more significantly, Europe will not be able to reap the full benefits of investment in talent and research. But it's a broader problem to solve.