In the Latvian capital Riga earlier this month came news that European policymakers have been desperate to hear. The European Innovation Council’s (EIC) Scaling Club, made up of the continent’s 120-strong stable of deep tech companies have collectively raised over 1.2 billion euros.
Finally, it seems, European investors are backing the continent’s technological ambitions with serious money.
The euphoria may be premature. Across the Atlantic, Nvidia alone commands a market value roughly equal to the eurozone’s 50 largest companies. Europe’s 1.2 billion euos milestone, whilst welcome, looks modest by comparison. The real test is whether Europe can reinvent its innovation playbook fast enough to avoid permanent technological vassalage.
Baltic ambitions
That this announcement came in Latvia tells its own story. A nation of 1.9 million people is positioning itself as Europe’s innovation darling. “To develop deep tech technologies in Europe, both public and private funding have to work together in a format that is most appropriate for the time, as well as for the specific company. Latvia is moving in this direction,” says Egita Aizsilniece-Ibema, a member of the EIC’s advisory council.
Latvia’s star turn comes courtesy of Aerones, a robotics outfit that raised 53.4 million euros to maintain wind turbines with robots. Unglamorous work, perhaps, but precisely the sort of practical innovation that American venture capitalists often ignore whilst chasing the next social media unicorn. Aerones solves real problems with sophisticated engineering—a particularly European strength.
The company’s success hints at something broader. Smaller European nations are carving out technological niches, freed from the burden of competing across every sector. Bulgaria’s EnduroSat wants to democratise satellite access. Spanish outfit Multiverse Computing has raised 256 million euros in 2025 alone, building quantum software for finance and energy. These aren’t household names, but they’re solving problems that matter.
The reinvention game
Europe’s approach differs markedly from its rivals. Rather than Silicon Valley’s winner-takes-all venture model or Beijing’s state-directed apparatus, the continent is crafting something altogether more European: collaborative, regulatory-savvy, and obsessed with sustainability.
Consider H2Site, another Spanish company, that raised 36 million for hydrogen separation technology. Its patented palladium-alloy membrane reactors hardly trip off the tongue, but they address Europe’s green transition whilst leveraging the continent’s materials science expertise. This isn’t disruption for disruption’s sake—it’s innovation with a purpose.
The funding breakdown reveals European priorities clearly enough. Next-generation computing attracted 447.1 million euros, averaging 37 million euros per round. Renewable energies claimed 220.7 million euros. Smart mobility added 133.8 million euros. These sectors align perfectly with European regulatory frameworks and consumer preferences, creating natural competitive moats.
The numbers, of course, tell only part of the story. The Netherlands’ Axelera AI raised 120.2 million euros across two years to build AI-native hardware. This represents a direct challenge to American semiconductor dominance, albeit from a continent that has already ceded most chip manufacturing to Asia. Success here would matter enormously—and remains far from guaranteed.
Following the money
The funding acceleration is striking: 287.6 million euros in 2024, already surpassed by 910.6 million euros in 2025. European investors are evidently becoming more comfortable with deep tech’s longer development cycles and higher capital requirements. The first cohort’s median funding round of 22.34 million euros suggests these companies have moved beyond seed funding into serious scale-up territory.
Context dampens the celebration somewhat. China invested over 70 billion euros in venture capital during 2024. America’s figure exceeded 180 billion euros. Europe’s entire venture ecosystem remains dwarfed by its competitors, making every success more precious and every failure more costly.
The EIC programme itself reflects this reality. Rather than competing across all sectors, European policymakers have concentrated resources where the continent might still achieve technological sovereignty. Quantum computing, renewable energy, and artificial intelligence hardware offer the best prospects for European leadership—assuming the companies can execute.
Industrial metamorphosis
Europe’s traditional industries face fundamental transformation. Automotive giants must navigate electrification whilst Chinese competitors flood global markets. Energy companies must balance green transitions with grid stability. Manufacturing firms confront AI-driven automation whilst labour costs remain stubbornly high.
The Scaling Club companies operate at this intersection of old and new Europe. They’re not simply building better mousetraps—they’re reimagining entire sectors. Smart mobility ventures aren’t just manufacturing electric vehicles; they’re rethinking transportation systems. Renewable energy companies aren’t merely installing solar panels; they’re creating intelligent grids that could reshape how societies consume power.
This transformation demands patient capital and regulatory sophistication—areas where Europe traditionally excels. The continent’s labyrinthine bureaucracy, often criticised as innovation-killing, may paradoxically provide advantages in sectors where compliance matters deeply. Quantum computing, biotechnology, and energy storage all operate in highly regulated environments where European expertise becomes valuable rather than burdensome.
The scaling test
The true measure of success lies not in funding rounds but in market conquest. European deep tech companies must now prove they can scale globally whilst maintaining technological advantages. The Club’s second cohort has grown teams by 27.7 per cent, suggesting talent acquisition remains robust. However, scaling beyond European borders demands different skills entirely.
American competitors benefit from vast domestic markets and deeper capital pools. Chinese rivals enjoy state support and manufacturing ecosystems. European companies must compensate through superior technology, regulatory expertise, or both. Some will succeed spectacularly; others will discover that good intentions and clever engineering aren’t enough.
The Scaling Club programme concludes in October 2026, providing a natural assessment point. By then, Europe will know whether its reinvention strategy has substance or merely represents expensive theatre. The continent faces a stark choice: continue playing by rules written elsewhere, or successfully rewrite the game itself.
Success demands more than wishful thinking. Multiverse Computing must prove quantum software can compete with IBM and Google. Axelera AI needs to challenge Nvidia’s hardware dominance. European renewable companies must lead global energy transformation, not merely participate in it.
Verdict pending
The 1.2 billion euros milestone deserves measured celebration. European deep tech is advancing, and investors are paying attention. Nevertheless, the ultimate test of any reinvention lies not in announcements but in results. Whether Europe’s technological awakening proves genuine or illusory remains to be seen.
For now, cautious optimism seems appropriate. The alternative—technological irrelevance—remains too grim to contemplate. Europe’s deep tech companies have raised some money. Now they must deliver the goods.
Photo: Dreamstime.
