The Rise of European Infrastructure Bets: A New Era for Deep Tech
A recent surge in funding across diverse sectors – from semiconductor physics to orbital logistics – signals a pivotal shift in European investment. The dominant theme isn’t a specific industry, but a strategic focus on bolstering the underlying infrastructure layers that power innovation. This week’s funding rounds exemplify a growing confidence in backing “hard tech” and patient capital, moving away from solely mirroring US investment trends.
AI’s Insatiable Appetite: The Interconnect Bottleneck
The demand for Artificial Intelligence is driving unprecedented growth in data processing, and with it, a critical need for faster, more efficient data transfer. Kandou AI, a Swiss semiconductor company, recently secured $225 million in a Series A funding round, led by Maverick Silicon, to address this very challenge. Their copper interconnect technology, utilizing a signaling method called Chord, promises to double to quadruple bandwidth even as halving power consumption. This positions Kandou AI as a potential disruptor to traditional optical interconnects, particularly as AI infrastructure scales.
As AI models grow exponentially, GPUs and CPUs require connections to increasingly large memory footprints. This creates a bottleneck where the speed and efficiency of data interconnects grow the limiting factor, not the compute power itself. Kandou AI’s technology directly tackles this issue, offering a potential solution for building massively scalable AI systems.
Beyond Silicon: Space, Defence, and Material Science
The investment landscape extends far beyond semiconductors. PAVE Space, a Swiss startup, raised $40 million in seed funding to develop orbital transfer vehicles, aiming to drastically reduce the time it takes to move satellites into their operational orbits. Currently, this process can take six to twelve months using onboard electric propulsion; PAVE Space aims to achieve this in under 24 hours.
Similarly, a growing emphasis on national security and geopolitical stability is fueling investment in defence technologies. Egide, a Paris-based startup, secured €8 million to develop electrically propelled interceptors and an AI-driven software platform for countering drone threats. This represents a clear alignment of European defence ambitions with deep tech investment strategies.
Deep materials science is also attracting significant attention. PaperShell, a Swedish company, received a €40.3 million grant to expand its production of structural composite materials made from kraft paper and a biobinder. This innovative material, already NATO-approved, offers a sustainable and high-performance alternative to plastics and aluminium.
The Rise of the European Deep Tech Ecosystem
Several other notable funding rounds highlight the breadth of this trend. Lace Lithography in Norway is challenging ASML’s dominance in chip patterning with a novel helium atom beam technology, securing $40 million in Series A funding. Origin, a London-based HR tech startup, raised $30 million to consolidate global employee benefits data using AI. And Laigo Bio in the Netherlands secured €17 million to advance its SureTACs platform for targeted cancer therapies.
Air Street Capital’s $232 million fund close, the largest solo GP venture fund ever raised in Europe, demonstrates a growing appetite for early-stage AI-first companies. Credo Ventures’ $88 million fund will focus on supporting founders from Central and Eastern Europe, while 360 Capital’s €85 million deeptech fund is specifically targeting dual-use technologies with applications in both civilian and defence sectors.
The Importance of Context and Institutional Knowledge
Beyond the headline-grabbing technologies, several investments focus on improving operational efficiency and decision-making. Interloom, a German startup, raised $16.5 million to build a “context graph” of enterprise decision-making, capturing the often-unwritten institutional knowledge that drives successful organizations. SOUS, an Amsterdam-based company, secured €4 million to develop an AI platform for independent restaurants, addressing a gap in digital infrastructure.
What Does This Indicate for the Future?
This wave of investment suggests a maturing European tech ecosystem, one that is increasingly willing to invest in complex, capital-intensive technologies with long development cycles. The focus on infrastructure – the foundational layers that enable innovation – is particularly noteworthy. Unlike consumer-facing applications, these technologies often require significant upfront investment and a patient approach to realize their full potential.
The convergence of space, defence, and materials science is also a significant trend. These sectors are often intertwined, with advancements in one area driving innovation in others. The increasing willingness of European investors to back these areas suggests a growing recognition of their strategic importance.
FAQ
Q: What is Chord technology?
A: Chord is a signaling method developed by Kandou AI that aims to double to quadruple bandwidth while halving power consumption in data interconnects.
Q: Why is orbital transfer important?
A: Orbital transfer vehicles can significantly reduce the time it takes to move satellites into their operational orbits, enabling faster deployment and reducing costs.
Q: What is a “dual-use” technology?
A: A dual-use technology has applications in both civilian and military sectors.
Q: What is SureTACs?
A: SureTACs is Laigo Bio’s platform that engineers the destruction of membrane bound proteins, targeting cancers and autoimmune diseases.
Q: What is the significance of the Air Street Capital fund?
A: It is the largest solo GP venture fund ever raised in Europe, indicating growing confidence in early-stage AI investments.
Pro Tip: Keep an eye on companies developing solutions for data movement and interconnectivity. These are likely to be key enablers of future AI and high-performance computing systems.
Did you know? The European Innovation Council is playing an increasingly important role in supporting deep tech startups, providing grants and investment to companies developing groundbreaking technologies.
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