Europe’s universities and research labs are increasingly proving they can do more than generate papers and patents: they are feeding a growing pipeline of deep tech and life sciences startups that are reaching meaningful scale. In 2025, that pipeline showed fresh momentum, both in the number of spinouts crossing major milestones and in the amount of capital flowing toward them.
A $398 billion spinout funnel with 76 standout companies
University spinouts have long been a defining feature of Europe’s deep tech landscape, and new data suggests the model is now maturing into a sustained startup engine. Dealroom’s European Spinout Report 2025 puts the value of Europe’s deep tech and life sciences university spinout funnel at $398 billion.
Within that broader ecosystem, 76 companies have reached a major “scale marker” in 2025: a $1 billion valuation, $100 million in revenue, or both. The list includes high-profile unicorns such as Iceye, IQM, Isar Aerospace, Synthesia, and Tekever—examples that help convince more investors that academic-origin startups can produce venture-scale outcomes.
New funds are forming to back European university talent
Alongside these performance indicators, new venture vehicles are also emerging to finance the next generation of spinouts. Two recently announced funds signal continued investor appetite for companies coming out of European technical universities and research institutions, and they also hint at a broader geographic reach beyond the long-dominant university clusters.
Denmark-based PSV Hafnium closed its debut fund at an oversubscribed €60 million (approximately $71 million). Its mandate focuses on Nordic deep tech, reflecting a belief that the region’s academic research base is still underexploited from a venture perspective.
Meanwhile, U2V (University2Ventures) is aiming for the same target size for its first fund—€60 million—and has already completed the first closing. U2V’s footprint spans several European tech hubs, with offices in Berlin and London and also in Aachen, underscoring how university spinout investing is becoming more structured and networked across borders.
From Oxbridge and ETH Zurich to a wider European deal map
Europe’s spinout pipeline is often associated with elite institutions, and the current landscape is still “topped” by Cambridge, Oxford, and ETH Zurich. But the investment category is becoming both more mature and more diverse.
On one end of the spectrum are established, university-adjacent firms that helped define this strategy in Europe, including Cambridge Innovation Capital and Oxford Science Enterprises. These players have moved beyond experimentation into a more industrial approach to turning academic research into venture-backed companies.
At the same time, the category is no longer limited to vehicles directly backed by a university or a network of institutes. It now also includes independent funds that view spinouts simply as attractive opportunities—companies with defensible technical foundations and the potential to return a fund, even if the investors have no formal institutional connection.
Unicorns, “centaurs,” and billion-dollar exits are reinforcing the thesis
The Dealroom figures highlight that European spinouts are not only being formed at scale; a meaningful number are reaching outcomes that matter to venture investors. That includes both large valuations and major revenue benchmarks, as well as exits.
In 2025, Dealroom identified six spinouts from Switzerland, the U.K., and Germany that generated investor exits of more than $1 billion. One notable example was Oxford Ionics, which was acquired by U.S.-based IonQ. Outcomes like this are particularly influential because they validate the full path from lab to market to liquidity—a lifecycle that can take years in deep tech.
These milestones also help reshape a long-standing perception that European innovation is strong at the research stage but weaker at turning breakthroughs into globally scaled companies. The numbers don’t remove the structural challenges, but they do show that the spinout channel is producing repeatable successes.
Funding is rising for spinouts even as Europe’s broader VC market cools
Another striking signal in the report is that spinouts are attracting more capital even while the overall European venture market is under pressure. Dealroom estimates that European deep tech and life sciences university spinouts are on pace to raise a near all-time-high $9.1 billion in 2025.
That growth stands in contrast to the broader funding climate: total VC investment in Europe is down nearly 50% from its 2021 peak. In other words, spinouts appear to be gaining share of a smaller pie—suggesting investors are prioritizing companies with strong technical moats, differentiated IP, and ties to leading research infrastructure.
Why spinouts can stay attractive in tighter markets
Deep tech and life sciences companies often take longer to mature than typical software startups, but they can also offer clearer defensibility once the science works. Spinouts frequently start with:
- Specialized research developed in university labs over years
- Access to talent trained in cutting-edge technical fields
- Early validation through peer-reviewed research or institutional partnerships
This doesn’t guarantee product-market fit, but it can create a foundation that investors view as more robust when risk capital becomes selective.
Big 2025 rounds point to broader sector appetite
Deal activity in 2025 also indicates that university-linked innovation is expanding across a wide set of strategic sectors. Large rounds during the year pointed to interest not only in established deep tech categories, but also in areas with industrial and geopolitical relevance.
Examples cited include nuclear energy startup Proxima Fusion and dual-use drone company Quantum Systems, which is now valued above $3 billion. The range—from energy systems to aerospace and defense-adjacent technologies—highlights how academic research can translate into commercially and strategically valuable applications.
This breadth also helps explain why Europe’s spinout potential extends well beyond a few famous university cities. Highly specialized labs exist across the continent, and when paired with the right venture support, they can generate companies capable of competing globally.
A deliberate push to find deals outside the usual hubs
For newer funds, building strong relationships outside the most visible universities can be both a mission and a competitive strategy. The traditional concentration of attention and capital around top institutions can leave other regions undercapitalized—creating opportunities for investors willing to develop local networks.
In a press release, PSV Hafnium’s partners argued that “The Nordic’s research institutions hold extraordinary, untapped potential,” a statement that reflects a broader thesis: deep tech deal flow is often fragmented, and investors who do the work to source it early may gain an edge.
PSV Hafnium itself is a spinout from the Technical University of Denmark (DTU), and it is investing at the early stage across the Nordic countries. It has made nine checks to date, including one into SisuSemi, a Finnish startup drawing on a decade of research at the University of Turku to develop surface cleaning technology for the semiconductor industry.
Support is improving, but growth capital remains a key bottleneck
The environment for European spinouts is becoming more supportive in several ways. Beyond venture funding, founders increasingly have access to:
- Grants to de-risk early technical development
- Commercialization support to help translate research into products
- Improved deal terms that can make spinout formation more founder-friendly
Still, one persistent issue stands out: growth capital. According to the report’s authors, the gap is “not a unique trend to spinouts, but something impacting the entire startup ecosystem in Europe.” Deep tech companies, in particular, can require significant follow-on funding to scale manufacturing, navigate regulation, and expand internationally.
The report highlights a significant dependency: nearly 50% of late-stage funding for European deep tech and life sciences spinouts comes from outside Europe, mainly from the U.S. Although this share has declined over time, it remains a meaningful indicator that Europe’s own capital markets are still not fully meeting the needs of companies moving from technical validation to large-scale execution.
The implication is straightforward: Europe may not capture the full economic upside of its investments in research and talent unless more late-stage financing capacity is built domestically. However, as the report notes, that challenge extends beyond spinouts and reflects a broader structural issue in Europe’s startup financing landscape.
Conclusion
Europe’s deep tech and life sciences spinouts are showing clear signs of maturation in 2025: a $398 billion ecosystem, 76 companies reaching unicorn and/or $100 million revenue thresholds, and a near all-time-high $9.1 billion in annual fundraising. New funds like PSV Hafnium and U2V point to growing specialization and broader geographic coverage, even as the lingering shortage of European growth capital continues to shape where these companies raise their biggest rounds.
This article is based on reporting originally published by TechCrunch.
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Based on reporting originally published by TechCrunch. See the sources section below.
Sources
- TechCrunch
- https://dealroom.co/reports/european-spinouts-report-2025
- https://psv.xyz/
- https://u2v.vc/
- https://www.eu-startups.com/2025/12/earlybird-x-spin-off-u2v-launches-e60-million-fund-back-deeptech-startups-from-european-tech-universities/
- https://www.physics.ox.ac.uk/news/university-oxfords-highest-value-quantum-computing-spinout-acquisition
- https://quantum-systems.com/news/quantum-systems-triples-valuation/
- https://www.sisusemi.com/
