Venture capital has never had more data at its fingertips — yet once the term sheet is signed, many firms revert to fragmented spreadsheets, stale updates, and institutional memory to manage the portfolios they’ve spent years building. The front end of the funnel is obsessively optimised; the back end is largely improvised.

Analysis of over 850 VC funds shows that structured portfolio monitoring consistently correlates with meaningfully higher IRR and TVPI. Most firms haven’t made the leap — not for lack of tools, but because poor oversight compounds quietly, over years, until it’s too late.

Marek Zamecnik, Co-CEO of Vestberry, has spoken with over 2,000 VC firms over seven years and seen the full spectrum of how funds operate behind closed doors. In this conversation, anchored in Vestberry’s recently published white paper, he explains why the industry has normalised the chaos — and what it takes to finally fix it.

You’ve spoken with over 2,000 VC funds over seven years. What’s the most surprising thing you’ve learned about how venture firms actually manage their portfolios — versus how they think they do?

The gap between perception and reality is consistently striking. Most GPs genuinely believe they have a handle on their portfolio — they know their companies, they talk to founders regularly, they have spreadsheets. But when you look under the hood, the data is fragmented, often months stale, and living in five different places that nobody fully trusts. The surprising part isn’t that firms lack data — it’s that they’ve normalized the chaos. They’ve built workarounds so elaborate that they mistake them for a system. The firms that have made the leap to structured portfolio management are almost universally shocked by how much they were missing, not because the information didn’t exist, but because they had no systematic way to surface it at the right moment.

The white paper argues that portfolio management is where “data can make the biggest impact,” yet it remains the least systematized part of the venture stack. Why do you think the industry has been so slow to catch up here, especially given how data-obsessed VC is on the deal sourcing side?

Deal sourcing is competitive and visible — you either win the deal or you don’t, and the feedback loop is immediate. Portfolio management, by contrast, is a slow burn. You hold investments for 4 to 10 years, and the consequences of poor oversight compound quietly over time. Nobody gets fired in year two for not having a risk dashboard. The urgency just isn’t there — until it is, usually when a company fails in a way that could have been caught earlier. There’s also an identity issue. VCs have always prided themselves on judgment, pattern recognition, relationships. The idea that a system could improve on that feels culturally uncomfortable in a way that, say, a better deal sourcing tool doesn’t. But the evidence is clear — analysis of 850 VC firms shows that funds investing in structured post-investment support consistently generate meaningfully higher IRR and TVPI. The data is making the case for itself.

“Data-driven” has become something of a buzzword in VC. What separates a firm that genuinely operates this way from one that just bought the right tools and put up a dashboard?

The dashboard is the easy part — and honestly, it can be a trap. Firms that just bought tools often have beautiful visualizations sitting on top of dirty, incomplete, and inconsistently defined data. That’s not data-driven, that’s data-decorated. The real separator is whether decisions actually change based on what the data says. Does the team trust the numbers enough to act on them? Is there a single source of truth that everyone — investment, finance, operations — draws from, or are there still three versions of the cap table floating around in email threads? Genuine data-driven firms have closed the loop between insight and action. They’ve standardized KPI definitions, they track actuals vs. budget at the company level, they have alerts that fire before a quarterly review. The mindset shift is from “we look at data when we prepare for board meetings” to “data is what triggers our interventions in the first place.”

Off-the-shelf data platforms like PitchBook and Crunchbase are now widely accessible. You argue that the real competitive advantage comes from proprietary portfolio data. How does a fund start building that proprietary layer — especially a smaller fund without a dedicated data team?

The good news is that proprietary data doesn’t need to be massive to be powerful. For a smaller fund, it starts with what you already have but aren’t structuring: your portfolio company updates, your KPI spreadsheets, your qualitative notes from founder conversations. The first step is simply centralizing it — picking one system and being disciplined about using it. You don’t need a data warehouse. You need a single place where every analyst, every partner, is drawing from the same source. From there, you layer in consistency: standardized KPI definitions, a regular reporting cadence, agreed-upon metrics by stage and sector. The insight you build from your own companies — their growth patterns, their failure modes, how they’ve responded to your support — is something PitchBook and Crunchbase can never sell you. That’s yours. Off-the-shelf platforms have become commoditized; every fund can buy the same signals. The differentiation now comes from the operating intelligence and founder relationships that only you have accumulated.

Most VC firms are deeply attached to their spreadsheets — and honestly, many are very good at using them. At what point does spreadsheet-based portfolio management become a real liability, and how do you make that case to a skeptical partner?

Spreadsheets are genuinely good tools, and I want to be careful not to dismiss them. Some very smart people run tight portfolio operations in Excel. The liability isn’t the spreadsheet itself — it’s what happens when the portfolio grows beyond what any one person can hold in their head and manually maintain. Version control breaks down. Data goes stale between reporting cycles. An analyst leaves and takes institutional knowledge with them encoded in a file only they understood. The early-warning system simply doesn’t exist — you find out there’s a problem at the quarterly review, not when the first signal appeared three months earlier. To a skeptical partner, I’d skip the philosophical argument and go straight to cost. How many hours does your team spend each quarter gathering, cleaning, and reconciling data before you can actually analyze it? What did you miss in the last portfolio review because the information wasn’t in front of you in time? The spreadsheet isn’t the problem; the question is what it’s costing you to maintain it — in time, in risk, and in decisions made on incomplete information.

You write that real-time analytics can surface issues months before they would appear in traditional reporting. What does that early-warning system look like in practice — what signals tend to matter most, and what do you do when they fire?

In practice, we focus on a concentrated set of five to six metrics per company — not thirty, not two. The goal is catching deviation from plan early: when actuals start diverging from budget, even modestly, that’s often the first signal of an emerging issue rather than a one-off blip. Revenue deceleration, cash runway compression, rising churn — these are the quantitative triggers. But the system becomes meaningfully more powerful when you layer in qualitative context: notes from board meetings, a founder who seemed stressed in the last call, team turnover ticking up for two consecutive quarters. Neither the data nor the intuition alone is sufficient — it’s the combination that lets you catch things before they’re visible in a P&L. When a signal fires, the response is calibrated: not every alert requires a call, but every alert requires a decision about whether it does. The discipline is in the triage, not the alarm. An early intervention can change outcomes. Intervention that happen at the quarterly review usually just documents them.

If a GP reads your white paper and wants to take one meaningful step toward data-driven portfolio management, this quarter — just one — what would you tell them to do first?

Pick one source of truth and commit to it. Not a new tool necessarily — just a decision that there is one place where portfolio data lives, and that everyone on the team uses it. Most firms don’t fail at data because they lack technology. They fail because data is everywhere and trusted nowhere. Before you invest in analytics, before you hire a data person, before you build a dashboard — establish that foundation. Standardize what you’re tracking, agree on how you’re defining it, and stop tolerating three competing versions of the same number. Everything else — the risk signals, the benchmarking, the forecasting, the LP reporting — is built on top of that. Without it, you’re just doing sophisticated analysis on unreliable inputs. With it, even basic analytics start generating real insight almost immediately.

Marek will bring this perspective to the stage at 0100 Europe in Amsterdam, where he will moderate the panel From Sourcing to Scaling: Creating Value in VC Portfolios Amid Liquidity Constraints. Joining him will be Laura Waldenstrom, Principal at Earlybird VC; Heiko Schwender, Managing Partner at CommerzVentures; AJ Tennant, Founder and General Partner at Tenacity Capital; Nicolas Barthalon, Partner at Ventech; and Alexander Essle, Investment Analyst at Maven11.

India is experiencing a generational shift in consumption that seasoned investors have not seen since China’s consumer boom a decade ago. Gen Z already controls 43% of discretionary spending in a market heading toward $7.3 trillion — and it is rewriting the rules of brand building along the way.

Archana Jahagirdar, Founder and Managing Partner of Rukam Capital, has been backing Indian consumer brands since 2019. In this interview, she makes the case for why Indian consumer goods have become a serious, standalone asset class — and why the window for early-mover advantage is narrowing.

India’s consumer market is expected to grow to $7.3 trillion by 2030, driven by a young and aspirational population. For a global investor who still views India primarily as a technology or outsourcing story, what is the case for considering Indian consumer goods as a serious asset class?

India’s consumer story today is no longer a derivative of its technology narrative; it is a standalone structural growth opportunity. What international investors often miss is that consumption makes up 57–58% of GDP and remains the largest contributor to economic activity.

Government data continues to show that India’s GDP growth, in excess of 7–8%, is being driven by domestic demand despite global uncertainty. This is underpinned by rising per capita income, increasing formalisation, and deeper digital penetration, all of which are fundamentally reshaping consumption patterns.

One of the most defining shifts within this consumption story is the rapid rise of quick commerce, which is projected to grow at over 40% annually until 2030. This reflects how consumer expectations around speed, convenience, and access are evolving across categories and geographies.

At the same time, India is steadily moving towards higher discretionary spending, creating long-term headroom for premiumisation. For international investors, this translates into a multi-decade opportunity to back emerging consumer brands, similar to what China witnessed a decade ago.

If one wants to tap into India’s future growth, it has to be through the country’s consumption engine.

Gen Z already controls 43% of India’s discretionary spending and is on track to reach 50% dominance by 2035. As someone who has been backing Indian consumer brands since 2019, how has your investment thesis evolved to reflect this generational shift — and what does it mean for founders pitching to you today?

We are experiencing not just a demographic change but a complete reimagining of the idea of consumption in India. Our thesis since 2019 has shifted from investing in products to investing in relevance. Gen Z is value-driven, highly connected, and driven by issues of identity, community, and purpose.

We are therefore investing in startups that design their products for discovery-based environments, have clear differentiation, and resonate culturally instead of serving a functional purpose. The speed of iteration, a great match between founder and brand, and scaling trust have become increasingly important.

From the perspective of the founder, this implies that they cannot fit Gen Z into their business model, but rather need to incorporate it in a way that is native to the process of creating the product. What really excites us are founders that know how to trigger consumption among Gen Z and leverage data effectively to build a scalable brand in the coming decade.

Consumer goods are often seen as less exciting than technology or AI investing. How do you respond to that perception — and what have you seen in your own portfolio that proves the return potential of backing the right consumer brand early in India?

Investment in the consumer segment today cannot be viewed in isolation from technology or AI. The most compelling consumer brands we see are, in fact, deeply tech-enabled businesses. Everything, from demand generation to supply chain management, personalisation, marketing, and retention, is driven by AI. Therefore, it is not a matter of consumer vs. tech but rather how well the consumer brand uses technology to scale up.

This equation becomes even more interesting in India because of tailwinds in the digital infrastructure. Thanks to UPI, social commerce, and direct-to-consumer distribution, brands can now grow fast and scale up faster. However, what makes for a winner is the ability of the brand to leverage brand instinct as well as data-driven decisions to drive outcomes.

The early signs of this combination are visible in our portfolio at Rukam Capital. Some of the best examples are brands that operate digitally native, are community-first and operationally disciplined, resulting in strong repeat behaviour, better unit economics, and a quicker path to profitability.

Investing in a consumer brand in India today is therefore about betting on founders who can marry aspiration with analytics. It is the combination of brand, distribution, and technology that creates sustainable value.

Your research shows that UPI transactions in India have grown from under 1 million per month in 2016 to over 16 billion per month today, and the D2C market has gone from $6 billion to nearly $80 billion in under a decade. What does that infrastructure buildout mean for investors looking at Indian consumer brands right now — is the timing better than ever?

Our report, Aspirations of New India, pointed towards changing behaviour patterns, so much so that nearly 70% of consumers are confident about transacting online, while more than half are discovering and buying brands digitally. Moreover, more than 60% of the Gen Z population makes purchases based on social media recommendations, which increases discovery and adoption of brands.

This presents a definite inflection point for investors. Brand building isn’t limited by physical distribution anymore, and brands can now go nationwide in their reach from day one, establish direct relationships with consumers, and innovate constantly based on feedback.

But at the same time, the expectations of brands have increased. Consumers now demand a smooth experience, fast deliveries, and quality that meets international standards.
In short, the timing couldn’t be better, but the key would lie in establishing consumer trust, having clear positioning, and providing consistent value.

Fund II targets sectors like pet care, jewelry, home décor, and single-specialty healthcare — categories you weren’t backing in Fund I. What signals in Gen Z consumer behavior specifically drove you to expand into these new verticals, and which of them excites you most right now?

What emerged strongly from our Aspirations of New India report is that Gen Z consumers are not just increasing their spends, they are reallocating them toward categories that deliver tangible value, self-improvement, and personal expression. This shift is fundamentally reshaping where and how consumption is happening, and that’s what informed our expansion into newer sectors with Fund II.

Categories like pet care, home décor, jewellery, and single-specialty healthcare are seeing this play out in different ways. Pet care, for instance, is driven by the ‘pet-as-family’ mindset, leading to higher, more consistent spending. Home décor and jewellery are increasingly becoming everyday expressions of identity rather than occasion-led purchases. Healthcare, especially single-specialty formats, is benefiting from a more proactive, preventive approach to wellness among younger consumers.

Our investments reflect these structural shifts. WiseLife is exciting because it captures the mainstreaming of wellness as a daily, habit-led category with strong repeated behaviour. Similarly, Antinorm aligns with a clear consumer pivot toward minimalistic, effective beauty, moving away from complex, multistep routines to simpler, more intuitive solutions.

The best part about it all is that even though the behaviours are scaling up very fast, there’s still a huge, untapped potential in these segments. It gives new age brands a tremendous opportunity to formalise the segments, develop trust, and differentiate themselves as leaders within their respective categories.

Gen Z in India is simultaneously drawn to homegrown brands and to products popular in other cultures — nearly 60% of your survey respondents have purchased from brands with international appeal. As a VC, how do you think about backing Indian consumer brands that can win both at home and globally?

This trend observed in Gen Z is not an inconsistency but rather a definite pointer of future trends in the market. Our “Aspiration of New India” survey proves that, while the strong preference towards authentic and culturally relevant brands from India is obvious, almost 60 percent of consumers find brands with global appeal equally attractive.

This finding corroborates the fact that Gen Z follows the “Indian at heart, global in appeal” ideology. Brands that will seamlessly bring in an understanding of consumers’ needs and insights to bring in products and services that match world-class quality standards will ultimately win the competitive battle.

See, Gen Z is culturally savvy and a digital native, and therefore makes no distinction between Indian and global. Appeal is also an important driver in product purchase journeys. Understanding and navigating through these trends, we at Rukam Capital believe in founders who can intricately bring forth culturally savvy and purposeful brands with the potential to go far beyond India and become global leaders. With global markets now more accessible than ever, it is important for brands to have a definitive global strategy and have the ability to scale operations to meet growing demands.

Archana Jahagirdar will be exploring these themes in person next week at 0100 Europe in Amsterdam, in a fireside chat moderated by Charlotte Hughes-Morgan, Reporter at Bloomberg.

When people talk about the funding gap in Europe, the conversation often turns to public policy, government programs, or the question of whether there is enough support for innovation. But that’s only part of the picture.

What really stands out is something less visible, and arguably more important over the long term: the lack of domestic institutional capital, especially from pension funds.

In the UK, for example, overseas pension funds have invested around 16 times as much in venture capital as domestic ones. In some years, as much as two-thirds of all VC funding has come from outside the country, while local pension funds have allocated almost nothing to the asset class for more than a decade.

Put simply, there is no shortage of capital flowing into European innovation. But most of it isn’t coming from within Europe itself. This creates an imbalance that goes beyond funding availability. European companies are being built, scaled, and, in many cases, exited with the support of foreign capital, meaning that a large share of the financial upside is captured abroad.

Over time, this has an impact, meaning the economic benefits of innovation are not fully recycled back into the local system. It makes venture ecosystems more dependent on external investors and global market conditions. And it raises broader questions about control, resilience, and the extent of Europe's ownership of its own innovation economy.

Europe Starts to Unlock Pension Capital for Private Markets

In Italy, tax incentives are beginning to play a key role in encouraging pension funds to allocate more capital to venture capital, showing how policy can directly influence investment behavior. Pension funds that invest in certain “qualified” venture investments can benefit from tax-exempt returns, making the asset class more attractive to long-term institutional investors.

While venture capital remains a niche allocation for most pension funds, these incentives are starting to turn the direction of travel, helping channel more institutional capital into innovation, supporting high-growth sectors such as healthcare and technology, and strengthening the link between long-term savings and the real economy.

In Switzerland, pension funds are showing interest in venture capital, but in practice, they remain prudent, maintaining limited exposure and keeping it a small part of their overall portfolios rather than making it a core investment strategy. Most pension funds allocate only around 1–2% of their assets to private equity in total, and venture capital sits within that as a “satellite” exposure, used mainly to complement more stable buyout investments rather than drive returns on its own.

Even though regulations now allow pension funds to invest up to 5% in venture, this has not led to a meaningful increase in allocations, as several structural challenges remain. These include the long lock-up periods, the difficulty of selecting the right managers, the need for specialized internal expertise, higher fees, and the wide variation in returns across funds.

As a result, while the direction of travel suggests growing awareness of venture as an asset class, most pension funds are still moving slowly, highlighting how difficult it is to turn interest into actual capital deployment.

Romania is also beginning to explore how pension funds can play a larger role in funding private equity and venture capital, reflecting a broader shift across Europe. Today, privately managed pension funds in Romania have very limited exposure to private markets, with only about 0.2% of their portfolios invested in private equity despite a legal cap of 1%.

A new proposal would gradually increase that limit to 5%, which could unlock more than €2 billion in potential investment, but with an important condition: public institutions, such as the Investment and Development Bank, would be involved to help structure and oversee these investments, thereby reducing perceived risk.

The Bigger Picture: Europe Has the Capital, But It’s Not Being Deployed

If you take a step back and look at the data, the scale of the gap becomes much clearer.

Across Europe, pension funds manage more than €3 trillion in assets, which makes them one of the largest sources of long-term capital in the region. And yet, according to market data, only around 0.12% of that capital is currently allocated to venture and growth investments. At the same time, European startups continue to raise billions every year, often relying heavily on international investors to do so.

Source: Mapping Pension Funds’ Attitudes - European Women in VC

The challenge is not that Europe lacks capital. It is that this capital is not being directed toward innovation at scale. As we already saw, many pension funds still approach venture capital indirectly, treating it as a small part of their broader private equity allocation rather than as a distinct strategy. They tend to favor later-stage investments, diversified fund-of-funds, or externally managed vehicles, which help reduce risk but also limit direct exposure to early-stage innovation.

When you compare this to the US, the difference becomes even more pronounced. American pension funds have historically allocated much larger portions of their portfolios to private markets, which has helped build deeper, more self-sustaining venture ecosystems. In Europe, by contrast, the system is still evolving, and institutional capital has not yet fully caught up with the growth of the startup landscape.

Europe has the savings, the talent, and the companies, but not yet the level of domestic institutional backing needed to fully support and scale them.

The Scale of the Opportunity: What Changes If Pension Capital Moves

When you look at the numbers more closely, it becomes clear that this is not just a small allocation gap; it is a very large, system-level opportunity.

If European pension funds were to gradually increase their exposure to venture capital and move closer to US levels, this could unlock around $210 billion in additional capital for the European ecosystem over the next decade. That kind of change would not just improve funding conditions at the margin. It would meaningfully change how companies are financed, how long they can stay private, and how much of their growth can be supported locally rather than relying on foreign investors.

Source: State of European Tech - Atomico

At the same time, current allocation levels across Europe remain extremely low, even in the more developed markets. Pension funds typically invest only a very small fraction of their assets in venture capital, often well below 0.1% of AUM, with some regions allocating almost nothing. This is not because the capital is not there, but because of how portfolios are structured, how risk is perceived, and how slowly institutional behavior tends to change.

When you put these two things together, you clearly see the patterns. On the one hand, Europe has a very large pool of long-term capital held within pension systems. On the other hand, venture capital, despite its role in driving innovation and long-term growth, remains a very small, underdeveloped allocation within those portfolios. That gap is what creates both the challenge and the opportunity.

🎙️ Discussing Europe’s Missing Pension Capital

In our latest Impact Talks conversation, we spoke with Chris Elphick, Head of Venture Capital at UK Private Capital, about how the industry has changed over time and what that shift really means in practice.

One of the key points he makes is that private markets have grown far beyond their original role. What was once seen as a niche part of finance, focused mainly on early-stage venture, has become a much broader system that supports companies at every stage of their development.

Today, private capital plays a visible role in the economy, backing thousands of businesses, supporting millions of jobs, and contributing meaningfully to overall growth. Even the rebranding from “venture capital” to “private capital” reflects this shift, as the industry now encompasses a much broader set of strategies, sectors, and company life cycles.

At the same time, the conversation brings into focus how this growth has been supported. Public institutions like the British Business Bank have stepped in to anchor the market, especially after Brexit, helping to fund emerging managers and attract additional investors.

Alongside this, international capital continues to play a major role in financing UK companies. But when you look more closely, it becomes clear that domestic institutional investors, particularly pension funds, are still largely missing from the picture.

Watch the interview

Let’s Continue the Conversation at 0100 Europe

As Europe starts to rethink the role of pension capital in venture, the conversation is no longer theoretical; it is actively shaping how LPs allocate capital across regions. At 0100 Europe, this discussion comes to life in a panel focused on how global investors are reassessing Europe’s position within the broader venture landscape. With capital becoming more selective and performance differences across regions more visible, LPs are taking a more structured approach to where and how they deploy capital, balancing exposure across the US, Europe, and emerging markets.

What makes this conversation particularly relevant right now is the mix of perspectives in the room. Bringing together investors with experience across fund-of-funds, direct investing, impact strategies, and family office capital, the panel reflects the diversity of capital shaping today’s ecosystem.

The discussion goes beyond whether Europe is “catching up” and instead focuses on how it is evolving, where it is becoming competitive, where it still lags, and how LPs are adapting their strategies in response. It is a continuation of the themes explored throughout this newsletter, but grounded in real allocation decisions being made today.

Join the conversation

This shift signals a broader truth: private markets are no longer “alternative.” They are foundational to economic growth. The terminology is catching up with reality.

Brexit, Fragmentation, and the UK–Europe Relationship

Brexit introduced structural friction into a previously integrated capital market. Fundraising dropped post-referendum sharply due to regulatory uncertainty and structural constraints on fund marketing and setup.

Yet geography—and economic interdependence—remain unchanged. The UK continues to act as Europe’s largest private capital hub, even as political separation persists. The challenge now is pragmatic:

• How to rebuild cooperation without formal reintegration

• How to align capital flows despite regulatory divergence

The emerging consensus is clear: Europe cannot afford fragmentation if it aims to compete globally.

The British Business Bank: Filling the Institutional Void

When the European Investment Fund (EIF) pulled back after Brexit, the British Business Bank (BBB) stepped in decisively. It became the largest LP in UK venture capital, playing a catalytic role in backing emerging managers and crowding in private capital.

Many of today’s leading UK venture firms began with BBB support. Its structured due diligence and long-term track record have effectively created a “stamp of approval” that attracts additional investors.

However, this success raises a strategic question:
Can Europe—and the UK—continue relying so heavily on public capital?

The Real Problem: Europe’s Missing Pension Capital

The most striking insight from the conversation is not about public funding—but the absence of domestic institutional capital, particularly pension funds.

• Overseas pension funds have invested 16x more into UK venture than domestic ones

• In some years, up to two-thirds of VC capital in the UK comes from abroad

• Domestic pension allocation to venture has been near zero for a decade

This creates a structural imbalance:
European innovation is being funded—and its returns captured—by foreign capital.

The implications are significant:

• Economic upside flows abroad

• Local ecosystems become dependent on external cycles

• Strategic autonomy is weakened

Why Pension Funds Lag Behind

The issue is not lack of capital—it is allocation behavior.

Key barriers include:

• Historical regulation designed to de-risk pension portfolios

• Cultural aversion to venture as an asset class

• Lack of internal expertise in VC investing

• Misalignment between long-term liabilities and perceived short-term risk

Ironically, pension funds are the ideal investors for venture:
they are long-term, patient, and capable of absorbing illiquidity.

Yet the transition is slow. Recent reforms in the UK aim to increase allocations to private markets to 5% by 2030, up from just 0.6% today.

Europe’s Scale-Up Problem

Europe excels at early-stage innovation. On a GDP-adjusted basis, the UK now rivals the US in early-stage output.

But the bottleneck is scaling.

Challenges include:

• Fragmented markets across countries

• Slower tech adoption

• Limited late-stage capital

• Regulatory and procurement inefficiencies

As a result, many European startups look to the US not just for funding—but for growth.

Rethinking Success: Europe vs. the US

The conversation challenges a common narrative: that success means building trillion-dollar companies domestically.

Instead, a more nuanced view emerges:

• A €10B company that scales globally is still a win

• Attracting international capital is not inherently negative

• Retaining R&D, talent, and operations locally matters as much as ownership

Even when companies are acquired by US firms, maintaining their innovation base in Europe contributes significantly to local ecosystems.

A Continental Challenge, Not a National One

The UK is not alone. Across Europe, the same structural issue persists:
strong innovation, weak institutional backing.

Initiatives like France’s Tibi scheme and Germany’s WIN program show progress, but fragmentation remains. The solution requires coordination at a continental level.

Venture investors are more and more interested in Deep Tech, but recent data shows a growing disconnect between where capital flows and where real-world deployment is needed.

So, what better time to look at why the industries that run on physical infrastructure are still being overlooked?

DeepTech now represents 32% of all VC funding in Europe, and the total investment reached $20.3bn in 2025, only 4% below the 2021 peak, while traditional tech remains 54% below its peak. On the surface, capital is moving toward science-driven innovation.

However, allocation is uneven.

A large share of recent growth is concentrated in AI-related segments, particularly software-driven or compute-heavy layers. In contrast, capital flowing into sectors tied to physical infrastructure, energy systems, industrial automation, and robotics deployment remains smaller and more volatile.

This creates a split inside Deep Tech: capital flows into “bits” (AI, compute, software-enabled science), while “atoms” (energy, manufacturing, construction, robotics in the field) require longer timelines and still struggle to attract consistent funding.

AEC-Tech provides a concrete example. Despite being one of the largest global industries, it accounts for only 0.3%–0.6% of total VC funding. Even with $40bn in cumulative VC investment, its share remains marginal relative to the software sector. Capital is entering Deep Tech, but it is not flowing in proportion to the industries where physical systems dominate.

Construction robotics also provides a useful reference point for how early this change still is. According to a recent report by Zacua Ventures, on-site robotics represents less than 0.03% of global construction spend, despite being one of the most discussed areas. Even with steady growth at mid-teens annual rates, the market remains a small base relative to the size of the underlying industry.

The Industries That Matter Most Are Still Physical

Deep Tech is positioned as the solution to global challenges, including climate change, resource scarcity, and demographic decline. These are not software problems. They require deployment in energy systems, industrial production, and built environments.

According to Dealroom, electrification is increasing demand for critical materials like lithium and rare earths, while demographic shifts are driving the need for automation in sectors like manufacturing and construction. These are capital-intensive systems tied to physical infrastructure.

In construction, this translates into a set of clearly defined workflows where automation is emerging. These include layout and measurement, groundworks, structural rebar, and inspection, which already account for most of today’s robotics revenue.

Tasks that are repetitive, physically demanding, and directly tied to project timelines, such as trenching, layout marking, or rebar tying, are the first to be automated. This shows that adoption is not related to technological changes but is driven by operational challenges.

Europe Has The Assets, But Not The Capital Structure

According to Dealroom and a few other market reports, Europe produces 1.5 million STEM graduates per year and employs 2.15 million researchers, with 21.8% of global patent applications.

It also hosts 30% of the world’s top Deep Tech universities. The supply side is not the constraint.

Besides this, Europe has a massive advantage when it comes to expertise. Almost 80% of VC-backed Deep Tech founders who have built a company after 2020 are highly educated and have a technical background.

The challenges come when we talk about capital allocation and scaling. European Deep Tech startups face an annual funding gap of $4bn to $24bn, especially at later stages. As a result, 70% of late-stage funding comes from non-European investors, often shifting companies’ center of gravity abroad .

This matters more for “atoms” than “bits.”

Physical infrastructure companies require sustained capital over longer time horizons. When that capital is unavailable locally, companies either under-scale or relocate.

This gap is amplified in AEC-Tech.

While total funding reached $550m in Q4 2025, it was still described as one of the weaker quarters and reflects volatility rather than consistent capital scaling. The issue is not initial funding but the continuity of capital over long deployment cycles.

The Real Bottleneck is Not Innovation, It is Industrialization

Deep Tech companies require upfront CapEx and longer development cycles before they generate revenue, which entails different risk profiles that investors need to understand to build their portfolios.

In AEC-Tech, this is visible in how solutions are adopted. Innovation spans on-site robotics, modular construction, building materials, and supply chain platforms. But adoption depends on integration into fragmented ecosystems, contractors, developers, regulators, and suppliers.

The funding data reflects this friction. Even as Series A/B rounds stabilize and late-stage rebounds, there are no net-new unicorns in Q4 2025. Capital is available, but scaling outcomes remains limited.

The venture model is optimized for speed and iteration. Physical systems require coordination, infrastructure, and time. This mismatch explains why capital concentrates upstream rather than downstream.

Sovereignty is Driving Investment, But Mostly in Strategic Sectors

Geopolitical pressure is accelerating investment in certain Deep Tech areas. Defence, security, and resilience accounted for 43% of Deep Tech funding in 2025, up from 20% in 2022. According to Dealroom, public capital is scaling across strategic sectors like:

• €43bn EU Chips Act

• €109bn France AI and data infrastructure

• €35bn Germany space investments

• €20bn+ annual defense-linked Deep Tech spend

These sectors are capital-intensive and physical, but they benefit from coordinated public demand.

AEC-Tech does not. Despite being essential infrastructure, it lacks equivalent policy-driven capital flows. The report shows EU + Israel lead globally in AEC-Tech, but still with only ~0.3% share of global VC

From Bits to Atoms: Where The Next Returns May Come From

As software becomes easier to build and replicate, defensibility shifts toward systems that combine software + hardware + infrastructure. The report notes that falling software costs are pushing investors toward “the physical and fundamental.”

Historically, major value-creation cycles, from telecom to manufacturing automation, have originated from shifts in physical infrastructure. For example, the cost of data transmission dropped 1000x over 30 years, and manufacturing time per vehicle declined from 40h+ to 10–15h. AEC-Tech shows early signs of this trend. Funding remains above pre-2021 levels (+49% on average per quarter) despite volatility.

The next cycle, energy systems, robotics, industrial automation, and construction, follows the same pattern. The question is - are venture investors ready to adopt the right model to capture it?

📝 Expert Interview | Inside the $25 Trillion Future of the Built Environment

To understand how central these industries are, it helps to look at their scale. The built environment, covering construction, real estate, infrastructure, and energy systems, is estimated at over $25 trillion globally, making it one of the largest sectors in the world. Yet despite this scale, it has seen limited technological transformation over the past decades, largely because of the way risk and incentives are structured across the value chain.

As Juan Nieto, General Partner at Zacua Ventures, explains, adoption is not just a technical challenge but an incentive problem. In construction, risk is often pushed down to contractors and subcontractors, meaning that adopting new technologies can directly conflict with short-term project economics.

Read the interview

Let’s Continue the Conversation at 0100 Europe

At 0100 Europe, we’ll take this discussion further in a dedicated panel on “Investing in the Next Frontier: What Makes Deep Tech Worth the Risk?”, focusing on how venture capital is approaching Deep Tech today, and what actually makes these investments work from early-stage innovation through to market impact.

The conversation will look at where capital is flowing, which segments are gaining traction, and how investors are navigating longer timelines, higher capital intensity, and the realities of scaling beyond the lab.

Joining the panel are investors actively shaping this space across different markets and strategies, including Ben Scheidt (Redstone), Patricia Rinke (AfricInvest), Kirsten Connell (Octopus Ventures), Amelia Armour (Amadeus Capital Partners), and Rubina Singh (Foresight Ventures). Together, they bring perspectives across AI, sustainability, early-stage Deep Tech, and emerging ecosystems

Join the conversation

“Only a small number of companies create the vast majority of value,” Evans explains. “So the key question is: how do you consistently access those companies?”

Back to Basics: The Power Law Still Dominates

Despite evolving market dynamics, the core mechanics of venture capital remain unchanged. Returns continue to be driven by a tiny fraction of outliers—often the top 1% of companies. For Evans, this reinforces a highly concentrated strategy focused on backing a select group of top-tier managers globally.

Rather than allocating capital based on geography or sector quotas, VenCap follows a bottom-up approach: identify managers with repeatable access to exceptional founders, then assess diversification as a secondary outcome—not a starting constraint.

This philosophy challenges a common LP instinct. “If you start by saying you want exposure to a certain sector—like AI—or a region, and then try to find managers to fill that bucket, that’s often the wrong way to do it,” Evans notes.

Access Is the Real Differentiator

In today’s competitive environment, access to top-tier funds is often cited as a key advantage—but Evans draws a clear distinction between perceived and genuine access.

For VenCap, true access means building a portfolio without compromise—never needing to include lower-conviction managers just to deploy capital. This discipline extends to fund sizing itself: capital raised is aligned with realistic deployment capacity into high-quality managers.

“It’s very easy to describe our strategy, but very hard to execute,” Evans says. “We size our funds based on where we have conviction—not the other way around.”

Concentration vs. Diversification: Avoiding “Naive Diversification”

While diversification remains a requirement for institutional portfolios, Evans cautions against what he calls “naive diversification”—adding managers simply to increase portfolio breadth.

Historical experience has reinforced this view. Portfolios with a larger number of managers did not necessarily perform better; in fact, they often diluted returns. Today, VenCap operates with a concentrated roster of roughly a dozen high-conviction managers globally.

The implication is clear: in venture, diversification should never come at the expense of quality.

The Expanding Role of Secondaries

As liquidity cycles lengthen, secondaries have become an increasingly important tool in venture portfolio construction. At VenCap, secondaries represent approximately 20% of the portfolio, complementing both early- and late-stage exposure.

Their role is twofold. First, they provide earlier liquidity by acquiring stakes in more mature funds. Second—and perhaps more strategically—they allow investors to increase exposure to proven winners.

“We’re effectively doubling down on the very best companies,” Evans explains, citing exposure to companies such as SpaceX, Databricks, and Rippling through secondary transactions.

Liquidity: A Portfolio-Level Reality, Not a Market Myth

While industry narratives often emphasize a liquidity drought, Evans offers a more nuanced perspective. At the portfolio level, outcomes can vary dramatically depending on exposure to top-performing funds.

“If you had concentrated exposure to the right companies, liquidity has actually been quite strong,” he notes, referencing major M&A events and IPOs across the portfolio.

This reinforces a central theme: venture outcomes are highly asymmetric—not just in returns, but in liquidity as well.

Rethinking Early vs. Late-Stage Convexity

A common assumption in venture is that early-stage investing provides the greatest upside. While Evans acknowledges the role of early-stage “outliers,” he emphasizes that late-stage investing can also deliver significant convexity—particularly as private market valuations scale to unprecedented levels.

With companies now reaching $100 billion or even trillion-dollar valuations, growth-stage investments can still generate meaningful multiples. Additionally, higher concentration at later stages—often with single investments representing up to 10% of a fund—amplifies return potential.

AI: A Byproduct, Not a Strategy

Despite the surge in AI-focused funds, VenCap has not pursued dedicated AI managers. Instead, it relies on top-tier generalist—or “serial specialist”—managers who consistently access leading AI companies.

This approach avoids the risk of making premature sector bets at the LP level. “We don’t think LPs are best placed to make those calls,” Evans explains. “If you’re backing the best managers, you’ll get exposure to the most important companies anyway.”

A Simple Model—That’s Hard to Execute

After deploying more than $3 billion across multiple cycles, Evans returns to a deceptively simple conclusion: success in venture is about consistently backing managers who back exceptional founders.

“It’s a very simple game,” he says. “The challenge is executing it consistently.”

In an increasingly global and competitive venture ecosystem, where capital, talent, and opportunity flow across borders, this discipline becomes even more critical. The best founders partner with the best investors—regardless of geography—and institutional portfolios must be constructed with that reality in mind.

Ultimately, for VenCap, the formula remains unchanged: prioritize access, maintain conviction, and let quality drive outcomes.

To explore why that is, and where the biggest opportunities for innovation lie, we spoke with Juan Nieto, General Partner at Zacua Ventures, a venture fund focused on the built environment. The firm invests in technologies shaping how we build, operate, and manage physical assets, connecting startups with large industry players across the construction and real estate value chain.

From Construction Sites to Venture Capital: Juan Nieto’s Journey

My father is an entrepreneur, so I was always quite close to business and technology growing up. Over time, I felt increasingly drawn toward the intersection of those two worlds.

After spending a few years investing in private markets, I realized I wanted to combine my civil engineering background with technology and innovation.

Originally trained as a civil engineer, he began his career working directly on construction sites before moving into management consulting in the United States. He later returned to Europe to join the investment team at Altamar CAM Partners in Madrid, where he spent several years working in private markets.

But his interest increasingly shifted toward the intersection of construction and technology. That led him to join CEMEX, one of the world’s largest cement companies, where he helped build and run CEMEX Ventures, the company’s corporate venture arm.

During his time there, the team invested in more than 20 startups globally while also developing programs around venture clienting, acceleration, and internal innovation.

Through that experience, we realized a few things. First, if you look at construction and the broader built environment, it’s actually the largest industry in the world.

It’s an enormous market with huge potential for disruption, but it’s also an industry where risk is constantly pushed down the value chain. Because of that, adopting new technologies often runs counter to the industry’s natural incentives.

In many ways, the biggest challenge in this sector is simply technology adoption, largely because the incentives are not always aligned.

Through that work, they realized construction may be the largest industry in the world, but it has seen relatively little transformation over the past century.

The second realization was that innovation can come from anywhere. It might come from India, Singapore, London, or San Francisco. For investors, it’s extremely difficult to track everything that’s happening globally.

That realization ultimately led to the creation of Zacua Ventures.

The firm was launched to bring together global corporate partners and emerging startups, helping both sides move faster: investors can make better-informed decisions, while startups gain direct access to large industry players that can accelerate their growth.

The idea behind the fund is closely tied to my own career. I’m a civil engineer by training, and I actually started my career working on construction sites.

By connecting these two sides, we believe we can not only make better investment decisions but also help startups scale faster by giving them access to real industry partners.

Since launching in 2022, Zacua Ventures has quickly become one of the most active investors in the built environment sector, deploying more than 40 investments across 27 companies worldwide. The firm is now deploying its second fund, continuing its mission to back technologies reshaping the world’s largest and most complex industry.

Fund Two and a Bigger Vision for the Built Environment

Since launching its first fund, Zacua Ventures has continued expanding its investment strategy. While the core focus remains the same, the second fund reflects a natural evolution of the firm’s approach.

Nothing really changed. Fund two is definitely larger than fund one, and we are deploying larger checks. So we are going after slightly larger opportunities than before.

The firm continues to invest under the same three thematic pillars that guide its strategy across the built environment: productivity, sustainability, and industrial resiliency. These themes shape how the team evaluates startups and technologies that could transform how the world builds and operates physical infrastructure.

But to understand Zacua Ventures’ thesis, Juan says it is important first to clarify what the built environment actually means, a term that goes far beyond construction technology alone.

People often think about construction technology as software for builders or contractors. But the built environment is much broader than that.

The built environment is not just construction technology. It’s the full system that shapes how the world is financed, designed, physically built, and ultimately operated.

In practice, this includes everything from construction, real estate, infrastructure, and energy systems to the supply chains, labor systems, and industrial equipment that support them.

Seen through this lens, the built environment becomes far more than a single industry.

If you think about everything happening around us, climate change, infrastructure resilience, defense spending, AI adoption, and population moving into cities, what unlocks all those opportunities is the built environment. It sits at the center of all those forces.

It’s essentially the physical operating system of our society.

And that system is facing massive challenges. Labor shortages remain one of the most urgent problems globally, limiting the ability to build housing and infrastructure at the scale needed.

Labor shortages keep coming up as the single biggest issue everywhere. We simply don’t have enough workers to build the housing and infrastructure the world needs.

At the same time, the industry accounts for a significant share of global emissions, and its environmental impact is another major pressure point.

The built environment is responsible for close to 40% of global carbon emissions, from materials like steel and cement to the operation of massive buildings and data centers.

For Juan, these challenges are exactly what make the opportunity so large. Construction technology is often understood as software for builders. But the real scale of this opportunity is much bigger.

Ultimately, the firm’s ambition is to support technologies that help the industry adapt to a rapidly changing world.

“What we’re really doing is enabling the world to become future-ready.”

How Global Trends Are Accelerating Demand

Many of the global trends shaping the economy today are actually intensifying the need to invest in the built environment. From artificial intelligence to infrastructure spending and housing shortages, Juan believes these forces are creating powerful tailwinds for the sector.

One of the best examples is the growth in demand for AI and computing, which is putting enormous pressure on data center development.

The growth of AI adoption has really put a spotlight on data centers. In the US today, data centers are already the second largest building segment after residential. They’ve even surpassed commercial buildings.

But the speed at which new data centers need to be built is not yet matching the demand for computing capacity.

The pace at which we need to build and bring data centers to market simply doesn’t keep pace with the demand for computing power.

Beyond AI, massive government spending on infrastructure and defense is also fueling demand for construction and industrial capabilities. A large share of these budgets ultimately goes into building physical assets.

You build highways, you build energy infrastructure, and all the systems around them. A lot of that spending ultimately goes into building.”

Germany’s recent infrastructure commitments illustrate the scale of this change.

After Germany passed the half-a-trillion-euro budget, experts estimate that roughly half of it will go directly into infrastructure.

Beyond infrastructure and technology, housing demand is another major force shaping the built environment.

From a social perspective, everyone wants to live in a home. And if you look at major hubs around the world, Sydney, Singapore, London, Madrid, Berlin, Washington, and San Francisco. The need for affordable housing continues to grow everywhere.

All these macro trends are essentially pushing the industry to build faster and more resiliently than ever before.

Where Technology Is Gaining the Most Traction

Across the built environment, a number of technologies are beginning to show real commercial traction. According to Juan, the sector still has enormous room for innovation, but several areas are already scaling quickly.

Every year, Zacua Ventures surveys more than 100 global investors focused on the built environment to understand where capital and innovation are flowing.

According to Juan, the results consistently show growing interest in technologies that address the industry’s biggest structural challenges.

One clear signal is that funding and investor interest in this space have increased every year over the past five to seven years.

Read the report

The Rise of AI in Construction and Operations

The first major wave is the growing adoption of AI across construction and asset management workflows. For many companies, AI is beginning to serve as a new intelligence layer atop existing systems, such as project management or site management tools.

Everything related to AI deployments, whether from a vertical application or a platform perspective, is gaining real traction.

We’re reaching a point where the intelligence layer is starting to replace some traditional site and project management systems.

The immediate benefits are often tied to productivity and margin protection, but the long-term impact could be even larger. Once organizations adapt to these new systems, Juan believes they will become extremely difficult to replace.

Historically, software plugged into existing workflows. AI might actually rewrite those workflows entirely. Once a team or a company adopts a new AI-powered workflow, it becomes incredibly sticky.

Robotics and the Physical Layer of Construction

A second area seeing significant progress is robotics and automation on construction sites. Early robotics solutions were often general-purpose tools, such as drones used for inspection or monitoring. Over time, more specialized machines began to appear for tasks such as drywall installation and bricklaying.

Today, the sector is entering a new phase driven by labor shortages and advances in physical AI.

At first, we saw technology-agnostic robots deployed on job sites, like drones for inspections. Now we’re seeing a third wave of robotics, task-agnostic robots that address labor scarcity and improve how we physically build and operate assets.

Autonomy is also beginning to emerge in heavy equipment and construction machinery. Examples include autonomous equipment for large-scale construction sites and platforms that can coordinate entire fleets of robots across projects.

We’re starting to see autonomy for large off-road equipment, which wasn’t a reality before. And some platforms can orchestrate entire robot fleets across job sites.

Infrastructure Technology and Energy Efficiency

The third major area of innovation is what Juan calls infrastructure technology, particularly solutions tailored to specific asset classes, such as data centers and energy systems.

As demand for computing infrastructure grows, new technologies are emerging to support the design, construction, and operation of these facilities.

Energy efficiency is also becoming a major priority, particularly in Europe, where policymakers are focusing on retrofitting existing buildings rather than constructing entirely new ones.

In Europe, there is a strong push to retrofit existing buildings rather than demolish and rebuild. Construction accounts for 30-40% of the waste generated across the continent.

As a result, technologies that help upgrade and reposition existing assets are becoming increasingly attractive.

Instead of demolishing and building new structures, the goal is to reposition existing assets and make them future-ready.

What Zacua Ventures Looks for in Startups

When evaluating potential investments, Juan explains that the firm still relies on many of the traditional principles of venture investing. But in the built environment, certain factors become even more critical.

We still focus on the traditional team evaluation. In the built environment, domain expertise matters more than ever.

Founders who deeply understand how construction, infrastructure, or real estate operate often have a significant advantage. At the same time, Zacua Ventures looks for teams that combine industry experience with strong technological capabilities.

Coming from hybrid backgrounds, understanding both the industry and the technology makes a big difference.

Beyond the team itself, the technology must solve a real problem for the industry. However, Juan emphasizes that the firm is not necessarily looking for solutions that completely reinvent how the sector operates.

Fortunately, the scale of the opportunity is enormous. Construction and real estate together represent the two largest industries globally, providing a massive addressable market for companies that manage to gain traction.

We’re lucky that we’re investing in construction and real estate. These are massive markets.

But the real challenge lies in how startups capture value within those markets. The built environment is highly fragmented, with value often distributed among thousands of small players.

These industries are historically highly fragmented, and much of the value comes from smaller players. Because of this, the go-to-market strategy becomes just as important as the product itself.

Sometimes, the one who adopts the technology is not the one who actually captures the value.

That dynamic requires founders to think carefully about how their solution will be adopted across the ecosystem.

Patience, Momentum, and Valuations in the Built Environment

Investing in the built environment often requires a different mindset than investing in traditional software sectors. Adoption cycles tend to be longer, and large industries such as construction and infrastructure can move more slowly than digital markets.

But for Juan, patience should never become an excuse for lack of progress.

There is definitely a segment of this market that demands patience. Patience can be part of the strategy, but it can’t really be an excuse. Even in industries known for slow adoption, the best startups still find ways to demonstrate momentum early on.

The most durable companies always find ways to show progress early, whether that’s converting pilots into real projects, expanding within customers, or showing that the go-to-market motion is getting smoother.

The scale of the industry can sometimes make it difficult for founders and investors to focus on where real value can be captured.

This is the world’s largest industry, and it sits behind almost everything we do in daily life. From the buildings people live and work in to the infrastructure that powers cities, the built environment touches nearly every aspect of society.

Because of this enormous scale, founders must think carefully about how they position themselves within the market.

Sometimes it’s easy to get lost in how big these markets are. The real question is how you capture value. That means clearly defining where the company sits in the value chain and how it reaches customers.

You really need to think about your defensible position, your go-to-market strategy, and how you actually capture value.

At the same time, investor interest in the built environment has grown significantly in recent years, which has pushed valuations higher.

We’re seeing a lot of appetite for the space right now, which is driving valuations up. Part of this momentum comes from the growing number of successful companies emerging from the sector. Several built-environment technology companies have achieved large exits or public listings over the past decade.

If you look at companies like Procore, which stayed private for almost 20 years and is now worth around $10 billion, or companies like Samsara in equipment telematics, they’ve attracted a lot of attention.

All these companies have raised significant capital over the past few years, and that’s attracting more analysts and investors to the space.

Regional Differences in The Built Environment

Although Zacua Ventures invests globally, Juan explains that regional dynamics play a major role in how technologies are adopted across the built environment.

Many of the core challenges, such as productivity, labor shortages, decarbonization, and infrastructure resilience, are universal. However, the way these problems appear in practice often depends on local markets.

The problems are typically global: productivity, sustainability, resilience, and labor shortages. But the constraints on the workflows are usually local.

Because of this, Zacua Ventures structures part of its investment team around geographic expertise, allowing it to better understand how different markets operate.

Our investment team is structured partly by geography because constraints and workflows vary by region.

Europe is actually the only region where robotics is consistently ranked as the top area of interest. This reflects the growing need to replace or supplement manual labor on construction sites.

In other regions, the priorities tend to look different. Rapid urbanization and economic growth are creating strong demand for infrastructure development.

In Asia, there is a huge focus on infrastructure, so technologies connected to infrastructure investment tend to gain traction faster.

Meanwhile, in regions such as Southeast Asia or Latin America, the adoption of new technologies can sometimes move faster when solutions offer clear financial returns.

In some markets, technologies get adopted quickly because the ROI is very clear.

The Role of Regulation in The Built Environment

Construction and real estate are also among the most regulated industries in the world, which means regulatory environments can significantly influence how technologies scale.

We try to avoid regulatory risk. Technologies that are adopted only because regulation forces them are not something we’re particularly excited about.

Instead, we look for solutions that create value independently of regulation, even though policy developments can still shape the broader market.

Sustainability and decarbonization policies are a good example. New regulations and government priorities are increasingly pushing companies to adopt greener technologies.

Within Europe, differing regulations between countries can also create challenges for startups trying to scale across borders.

While initiatives like the EU’s proposed “28th regime” aim to simplify rules for startups more broadly, similar frameworks for the built environment are still limited.

However, Juan notes that most of these efforts are still driven by a mix of public programs and private initiatives, rather than by a single, unified regulatory framework.

So far, we haven’t seen a dramatic simplification of regulation for the built environment across Europe. In our sustainability and decarbonization investments, we’re definitely seeing European-level initiatives helping these solutions scale faster and access public capital.

AI, Automation, and the Future of the Built Environment

Right now, much of the excitement in the built environment centers on artificial intelligence, but Juan notes that applying AI to construction and real estate presents unique challenges.

Unlike many digital industries, the built environment has historically struggled with data standardization and accessibility, making the deployment of AI more complex.

There is a lot of excitement around AI, but construction and real estate are not industries known for strong data practices.

Access to structured, reliable information is often limited, which means many companies are still working to build the data foundations required for advanced AI systems.

Being able to access clean data or well-organized datasets isn’t always straightforward.

Despite these challenges, Juan sees several AI-driven applications gaining traction, particularly vertical AI solutions designed to automate specific processes.

Takeoff software, for example, where AI can extract the materials from drawings, BIM models, or 2D plans, something machines can already do better than humans.

Another trend he finds interesting is the platformization of construction technology.

Historically, the industry relied on isolated tools solving individual problems. But that may be starting to change.

We’re moving from point solutions toward unified operating systems for the industry. AI is helping accelerate that transition by making it easier to integrate multiple processes into a single system.

The technology simply wasn’t ready before, but now AI is unlocking that possibility.

Another area Juan continues to watch closely is decarbonization, as the built environment remains one of the largest sources of global emissions. While sustainability technologies are attracting attention, Juan believes long-term success will depend on clear economic incentives.

Decarbonization on its own is not enough. There needs to be a strong economic case behind it. That value can come from improved efficiency, reduced materials usage, or better building performance.

If you can save materials or improve performance while reducing emissions, then the business case becomes very strong.

Will AI replace humans in the built environment?

Despite rapid technological progress, Juan does not believe the built environment will become fully automated anytime soon.

While AI and robotics can dramatically improve productivity, human expertise will continue to play a crucial role.

Defense has quickly moved from a niche topic to one of the most urgent conversations in European innovation, due to the rising global tensions.

At 0100 DACH in Vienna, European investors and innovation leaders gathered to discuss how geopolitics, technology, and capital are reshaping the defense ecosystem. What emerged from these discussions was clear: Europe is entering a new phase where defense is no longer episodic spending during crises; it’s becoming a long-term strategic market.

The panels underlined how defense innovation, private capital, and industrial capacity must come together if Europe wants to close decades of underinvestment and keep pace with the rapid innovation cycles seen on modern battlefields.

Here are some key insights from three discussions that happened at our latest conference.

Aerospace & Defense in DACH — A Big Change in the Market

The conference opened with a keynote on the evolution of the aerospace and defense markets in Germany, Austria, and Switzerland (the DACH region). Europe’s defense spending is no longer a temporary response to geopolitical shocks. Instead, it represents a structural transformation of the market.

Politics is now directly shaping industrial demand and market structures. For investors, the key question is no longer whether governments will spend money. Defense budgets are clearly increasing. The real issue is how that spending is structured, governed, and executed, because that determines whether political commitments translate into investable industrial opportunities.

Five years ago, defense suppliers were competing aggressively for limited procurement opportunities. Today, the situation has reversed: governments and procurement agencies are competing for production capacity, often willing to wait years or pay higher prices just to secure delivery slots.

Germany: From Emergency Spending to System Design

Germany provides the best example of this transformation. The country is moving away from short-term crisis responses toward long-term defense system design.

Three trends are driving this change:

• Structural demand growth – defense spending is becoming embedded in long-term planning rather than relying on one-off emergency packages.

• Procurement acceleration – speed is now treated as a strategic capability, reflecting the urgency of strengthening European defense readiness.

• Industrial scaling – defense contractors are seeing large backlogs and the strongest demand visibility in decades.

For investors, this changes the risk profile. The main concern is no longer demand uncertainty. Instead, the critical question is whether the defense industry can execute, particularly in areas such as supply-chain resilience, skilled labor availability, industrial throughput, and delivery discipline.

In this context, Germany is increasingly acting not just as a buyer of defense equipment but as a “market architect,” shaping the structure and pace of European defense demand.

Austria: Focused Capability Development

Austria represents a different type of opportunity. While the country is smaller and politically more cautious, it is pursuing a coordinated modernization effort involving government, military leadership, and industry.

Defense budgets are rising, with priorities focused on:

• air defense

• operational readiness

• training and interoperability with European partners

Austria is unlikely to become a large-volume defense market. Instead, its role is best understood as a focused capability and integration story, closely aligned with broader European security needs.

Switzerland: Precision and Stability

Switzerland plays yet another distinct role in the regional ecosystem. While politically neutral, the country is deeply integrated into the European defense industrial base.

Rather than competing in large weapons platforms, Switzerland specializes in:

• high-precision subsystems

• advanced sensors

• secure communications

• lifecycle services and reliability engineering

Many Swiss defense companies are highly export-oriented, with exports accounting for the majority of production in some cases. This positions Switzerland as a supplier of trusted, high-end components within global supply chains.

Swiss neutrality also contributes to relatively stable defense budgets and reduced political volatility, making the country a consistent industrial partner even as Europe’s security landscape evolves.

Innovation and Security — How Technology is Changing the Defense Ecosystem

From a policy perspective, one of the most important developments has been the growing focus on dual-use technologies, which can serve both civilian and military applications. These include artificial intelligence, cybersecurity, and other enabling technologies.

Military organizations are also taking a fundamentally broader view of the defense ecosystem. For example, Austria's Ministry of Defense has moved from a purely procurement-focused posture to a more active role in capability development, including efforts to identify and scale promising startups that can deliver relevant applications.

Panelists also pointed to the rise of cyber and space as newly critical domains still in early build-up phases, and to territorial defense replacing expeditionary missions as the primary strategic orientation across European militaries.

The investment community has undergone a consistent reappraisal. Until recently, defense was effectively off-limits for many funds, excluded from ESG frameworks and seen as reputationally risky. One panelist described a 2020 investment in personal protective equipment (bulletproof vests and helmets) in which it was genuinely difficult to find co-investors willing to participate, and debt funds were equally reluctant.

That environment has changed.

Today, defense is viewed as part of ESG rather than as excluded from it, reflecting the widely shared understanding that security is a prerequisite for the societies that ESG frameworks seek to protect. The European Investment Bank has clarified that investment in dual-use and even single-use defense is permissible. As one panelist put it, the regulatory text hasn’t changed, but how investors interpret and live by it has.

Building a Trans-European Defense Innovation Corridor

Another panel focused on cooperation between Western Europe and Central and Eastern Europe (CEE).

Participants described Europe as being at an “inflection point,” where geopolitical tensions and the war in Ukraine have exposed weaknesses in the continent’s fragmented defense system. One of the main challenges discussed was the gap between public funding and private capital.

While governments and European institutions are increasing defense spending, speakers emphasized that private investment will be essential to support long-term development in areas such as defense technology, military mobility, and industrial infrastructure.

Another recurring theme was supply chain development. Panelists also mentioned that stronger supply chains across Europe are critical for building resilient defense production systems.

Several speakers also talked about the role of Ukraine in the defense innovation ecosystem. The country’s wartime experience has created fast feedback loops between developers and military users, accelerating the development and testing of new technologies.

At the same time, Europe faces challenges around coordination and alignment. Different countries continue to pursue national defense strategies, which can slow collaboration and reduce economies of scale.

Let’s Continue the Conversation at 0100 Europe

The discussion around defense and dual-use innovation is far from over.

At 0100 Europe 2026 in Amsterdam (21–23 April), we’ll continue exploring how private markets are approaching one of the most important changes in Europe’s innovation landscape: the growing role of defense technology and dual-use startups.

One of the sessions, “Readiness 2030: Private Market Investments in Defence and Dual-Use Innovation,” will look at how investors are positioning themselves for the strategic demands of the coming decade. The panel will examine emerging investment trends, capital allocation priorities, and the opportunities and challenges of backing technologies that serve both commercial and security needs.

Speakers include investors and industry leaders such as Giuseppe Laceranza (Keen Venture Partners), Alexander Vaselek (CIMEDO), Greg Shipley (In-Q-Tel), and Marko Maschek (Marondo Capital).

Join the conversation

📝 Expert Interview | Europe’s Dual-Use Tech Moment

Another conversation that connects closely with the themes discussed at 0100 DACH is our interview with Valentin Menedetter, General Partner at Vektor Partners, a firm focused on deep tech and dual-use innovation.

When we spoke with Valentin, he explained that Vektor began investing in deep tech with dual-use applications as early as 2020, before defense technology became a mainstream venture topic. The thesis was simple: many of the most important technologies being developed today naturally sit at the intersection of commercial and security applications.

“We didn’t set out to launch a defense tech fund,” Valentin noted. “We focused on deep tech with horizontal applications—and many of those naturally overlapped with defense.”

That view has proven timely.

According to him, LP interest in dual-use investing has increased significantly in recent years, as investors begin to recognize that technologies developed for security and defense also play a key role in broader areas like energy resilience, infrastructure protection, and economic stability.

Among the areas he sees as particularly important for the next generation of dual-use startups are:

• Edge computing and computer vision, enabling real-time processing for autonomous systems

• Software-defined hardware, allowing systems to adapt more quickly to new operational needs

• Energy resilience and decentralized power systems

• Secure telecommunications and infrastructure networks

These themes strongly echo what we heard on stage at 0100 DACH, where speakers emphasized the growing role of startups, private capital, and deep tech innovation in shaping Europe’s defense ecosystem.

Watch the full conversation

📝 Expert Interview | Deep Tech, AI, and the New Defense Opportunity

Earlier this year, we spoke with Daisy Cai, General Partner at B Capital, about where she sees the strongest long-term opportunities emerging in frontier technologies. Her perspective helps explain why investors are increasingly paying attention to sectors like robotics, semiconductors, and defense.

In the interview, Cai described deep tech companies as startups working at the technical frontier, often spending years in research and development before bringing products to market. While this means higher early technical risk, it can also create stronger long-term competitive advantages once commercialization begins.

She pointed to three areas where she sees particularly strong momentum:

• Robotics, driven by labor shortages and advances in AI-enabled autonomy

• Semiconductors and data center infrastructure, fueled by the rapid growth of AI computing

• Defense technologies, where increased global military spending is creating new opportunities for startups

This perspective connects closely with the discussions we heard at 0100 DACH, where speakers emphasized how defense innovation is increasingly driven by startups, dual-use technologies, and faster development cycles.

Read the interview

🌍 Across the Ecosystem | News & Useful Resources for You

Defense and dual-use technologies are quickly becoming one of the most discussed areas in Europe’s innovation and investment ecosystem. Governments are increasing defense budgets, startups are entering the sector, and investors are exploring how private capital can support technologies related to security, resilience, and industrial capacity.

At the same time, the market is still evolving. Many investors are approaching the defense sector carefully, navigating regulatory complexity, procurement timelines, and ESG considerations that have historically shaped it.

Here’s a look at how the discussion around defense, dual-use innovation, and private capital is developing across the ecosystem:

🗞️ News | Will the Pentagon’s Anthropic controversy scare startups away from defense work?

A recent controversy involving the U.S. Department of Defense, Anthropic, and OpenAI is drawing attention to the growing complexities of working with government defense contracts.

According to a report discussed on the TechCrunch Equity podcast, negotiations between the Pentagon and the AI company Anthropic over the use of its Claude technology broke down after the U.S. government designated the company a potential supply chain risk. Anthropic has since said it will challenge that designation in court.

Meanwhile, OpenAI quickly announced a separate agreement with the Department of Defense, sparking significant public debate. The deal triggered backlash among some users, with reports that surges in ChatGPT uninstalls followed the announcement.

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🗞️ News | Ukrainian-founded Uforce raises 50 million and becomes a potential first defense tech unicorn

Ukraine’s defense technology ecosystem continues to gain global investor attention.

Ukrainian-founded startup Uforce, which develops land, sea, and air defense systems, has raised $50 million in seed funding, reaching a valuation of more than $1 billion and potentially becoming the first defense tech “unicorn” associated with Ukraine.

According to the company, its technologies have already been tested in real battlefield conditions during the war in Ukraine. The startup reports hundreds of millions of dollars in contracted orders and strong growth, with revenue increasing by 450% in 2025, and is already operating profitably.

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🗞️ News | From CIA to CEO, spies step out of the shadows and into the boardroom

A growing number of former intelligence officials are moving from government service into the startup world, bringing operational experience into emerging defense technology companies.

According to a recent Bloomberg report, several former CIA officers are now launching or leading startups focused on data analytics, cybersecurity, and AI-driven defense technologies. One example is Brian Carbaugh, a former CIA officer who is now CEO of Andesite, a Virginia-based data analytics company.

The trend comes at a time of rapidly expanding defense budgets. The U.S. administration is reportedly pushing for a $1.5 trillion defense budget, which could significantly increase funding for technologies such as artificial intelligence and other advanced systems.

Rising geopolitical tensions, including conflicts involving cyber and electronic warfare capabilities, are also increasing demand for faster innovation in national security technologies.

Read the news

The Evolution of Venture Debt in Europe

Over the past decade, venture debt has evolved from a niche financing instrument into a mainstream asset class within European venture ecosystems. As venture capital markets expanded and startup valuations climbed, lenders increasingly stepped in to provide non-dilutive capital that could extend runway, finance growth, or bridge companies between equity rounds.

However, as the market matured, venture lenders began shifting their focus upmarket. Larger funds and institutional players now predominantly target later-stage startups with stronger balance sheets and sizable funding rounds, often providing debt tickets of €10 million or more.

This shift has created a structural gap in the market—particularly for earlier-stage startups that require smaller amounts of capital to scale.

The €1–5 Million Gap

According to Bartolini, the most underserved segment lies in the €1–5 million lending range, where many promising startups struggle to secure appropriate financing.

For lenders managing larger funds, deploying smaller tickets is often economically inefficient. The operational cost of underwriting and monitoring a €2 million loan can be similar to that of a €20 million facility, making smaller deals less attractive for large venture debt providers.

At the same time, startups at earlier stages often lack access to traditional bank lending, leaving them caught in what Bartolini describes as the “missing middle” of venture financing.

These companies typically already demonstrate:

• strong product-market fit,

• growing revenues,

• backing from reputable investors.

Yet they remain too early for large venture debt providers and too risky for banks.

Why Early-Stage Growth Lending Matters

Early-stage growth lending aims to address precisely this gap. Instead of focusing exclusively on late-stage companies, the model targets startups that have already validated their products but still operate at relatively early stages of growth.

The approach offers several advantages.

First, non-dilutive financing allows founders to preserve ownership while continuing to scale their businesses. In volatile venture capital markets, this can be particularly valuable as companies seek alternatives to equity funding.

Second, smaller debt facilities can serve as strategic growth catalysts, helping companies finance hiring, product development, or market expansion without immediately raising new equity rounds.

Finally, from an investor perspective, early-stage lending can offer attractive risk-adjusted returns if underwriting is done carefully and the lender has strong access to venture ecosystems.

A New Generation of Lenders

Bartolini believes that addressing this gap requires a new generation of specialized lenders—firms designed specifically to operate efficiently at smaller ticket sizes.

Unlike large venture debt funds, these lenders focus on:

• lean operational structures,

• close collaboration with venture investors,

• deep understanding of early-stage B2B business models.

The strategy is particularly relevant for B2B startups, which often have predictable revenue streams and contractual customer relationships that make debt financing more feasible.

By combining venture ecosystem knowledge with private credit discipline, specialized lenders aim to build a sustainable model for supporting earlier-stage companies.

The Role of Private Credit

The rise of early-stage growth lending also reflects broader shifts in global financial markets. Private credit has expanded rapidly over the past decade as institutional investors seek yield and diversification beyond traditional fixed income.

Within this context, venture debt—and its earlier-stage variants—represents a natural extension of the private credit ecosystem into innovation-driven sectors.

Europe, in particular, still offers significant room for development. Compared with the United States, the continent’s venture lending market remains relatively underpenetrated, suggesting that new strategies and specialized funds could play a growing role in financing the next generation of startups.

Looking Ahead

As capital markets evolve and venture funding cycles become more volatile, founders are increasingly exploring hybrid financing structures that combine equity and debt.

For Bartolini, this shift underscores the growing relevance of early-stage growth lending. By targeting the €1–5 million segment, lenders can unlock opportunities that traditional venture debt providers have largely overlooked.

If successful, this approach could help bridge one of the most persistent funding gaps in the European startup ecosystem—providing ambitious early-stage companies with the capital they need to scale while preserving flexibility for the future.

For years, conversations around venture capital have focused on growth, innovation, and opportunity. Europe’s startup ecosystem has expanded rapidly, producing new technologies, ambitious founders, and an increasingly sophisticated investor base. Yet beneath this momentum lies a quieter imbalance—one that becomes clearer when we look closely at who is building companies and who is allocating capital.

Women remain significantly underrepresented across the venture landscape. The gap is visible not only in funding statistics but also in industry leadership. Even at our own conferences, where we aim to include at least one female voice on every panel, reality sometimes makes that goal difficult to achieve.

The numbers help explain why. Women hold only about 14% of partner-level roles in venture capital firms and represent roughly 10% of startup founders. The disparity becomes even more pronounced as companies scale and funding rounds grow larger.

A similar pattern exists in private equity. As of early 2026, women hold an estimated 11–15% of senior investment roles globally, highlighting how slowly representation changes at the top levels of capital allocation.

The funding gap is even more striking. All-female founding teams receive just 3% of venture investments below €10 million and only 0.88% of investments above €10 million, suggesting that access to capital narrows further as companies move into later stages of growth.

Today, we take a closer look at what sits behind these numbers—and what they reveal about how capital flows across Europe’s venture ecosystem.

Europe’s Gender Investment Gap Still Holding Back Growth

A report from the European Commission highlights a significant gender investment gap across Europe, with only about one in five tech startups founded between 2020 and 2025 including at least one woman. Even when women are involved as founders, their companies tend to receive less funding than those led by men.

The share of startups with female founders varies widely by country, with Latvia, Italy, and Portugal showing the highest levels of gender diversity, while countries like the Czech Republic and Hungary remain far below the European average. Closing this gap could have a major economic impact, potentially increasing EU GDP by about €600 billion by 2040.

The disparity extends beyond venture capital.

Female-owned small and medium-sized businesses are less likely to receive bank loans, even when company size and sector are similar.

Experts attribute the gap to several factors, including lower representation of women in investment decision-making, societal expectations around caregiving, and limited access to entrepreneurial networks. At the same time, women control a growing share of personal wealth in Europe, which could unlock trillions of euros in additional investment if participation matched that of men. However, structural biases and geographic disadvantages continue to limit women’s access to capital across the region.

Another important insight from the report is how capital allocation within the venture ecosystem reinforces the funding gap. Women remain significantly underrepresented among investors themselves, making up only about 15–17% of General Partners (GPs) in European venture capital firms, and an even smaller share of Limited Partner investment committee members.

The report also highlights the large economic opportunity lost due to this imbalance. Evidence shows that startups founded or co-founded by women can generate 10% more cumulative revenue per euro invested than those founded only by men, while female-led firms often demonstrate stronger ESG performance and workforce development. At a broader level, closing the gender investment gap could unlock hundreds of billions of euros in economic value, potentially adding between €250 billion and €600 billion to EU output over time.

Female Founders Still Struggle to Secure Venture Funding in Europe

Despite a small increase in the number of women making investment decisions at European venture capital firms, female-founded startups are receiving less funding overall.

According to PitchBook, women now make up a slightly larger share of VC decision-makers—13% at smaller funds and 16.5% at larger firms. However, this growing representation has not translated into more capital for women-led companies.

In fact, funding for female-founded startups fell for the fourth consecutive year in 2025, with women raising €9.5 billion, more than 15% less than the previous year. Their share of total deal value also dropped to 16.5%.

Meanwhile, male-founded startups saw deal values grow, widening the funding gap. Even in booming sectors like AI, women-led companies captured only a small portion of investment—about €3 billion out of €23.5 billion total. Some sectors show stronger representation, particularly life sciences and femtech, where funding improved and several notable exits occurred.

Still, overall data suggests that increasing diversity among investors alone has not yet solved the broader funding imbalance facing female founders in Europe.

What is The Real Perspective From The Founder’s Side?

Four female startup founders argue that International Women’s Day in the tech and startup world often feels performative rather than meaningful. They say the celebration tends to highlight “female founders” as a special category instead of treating them simply as entrepreneurs.

While well-intentioned events like women-only panels, networking breakfasts, and mentorship groups exist, the authors believe these initiatives don’t solve the real issue: women still lack consistent access to the main networks, relationships, and decision-making spaces where funding and business opportunities actually happen.

A Women Perspesctive: Building the Foundations of the AI-Native Economy

As venture capital continues to evolve, new technologies like artificial intelligence are shaping how investors evaluate startups. In our latest interview, we spoke with Patricia Pastor, General Partner at Next Tier Ventures, about how AI is changing the way software companies are built.

Patricia focuses on backing founders building AI-native companies, where artificial intelligence is not just a feature but the core of the product. She explains how investors today are looking for teams that can build strong technology, protect their data, and create businesses that can scale over time.

Her perspective also connects to a broader conversation about who gets access to capital in today’s ecosystem. As AI becomes one of the most competitive sectors in venture capital, the expectations for founders are rising. Patricia shares what she looks for in early-stage teams, how investor thinking around AI has matured, and where she sees the most promising opportunities ahead.

In a market where capital and attention are increasingly concentrated in a few sectors, voices like hers offer an important view on how innovation, talent, and investment decisions shape the future of entrepreneurship.

Read the interview

Join the Discussion about The AI Gold Rush at 0100 Europe in Amsterdam

The discussion explores how investors can separate real enterprise value from hype in Europe’s fast-growing AI ecosystem. As AI attracts large amounts of capital and attention, the discussion focuses on where meaningful opportunities are emerging, how AI is being adopted across industries, and what signals investors should look for when evaluating companies building long-term value.

Bringing together investors and operators from firms including Global Ventures, Partech, Eight Roads, Andreessen Horowitz’s a16z Perennial platform, and TechTorch, the panel also addresses the practical realities of investing in AI in Europe. Our panelists examine major market trends, the role of enterprise adoption, and the factors that differentiate durable AI businesses from short-term momentum.

Learn more

🌍 Across the Ecosystem | News & Useful Resources for You

We’re not the only ones exploring the challenges and opportunities shaping women’s participation in venture capital and entrepreneurship. Across the innovation ecosystem, more researchers, investors, and founders are examining the structural factors behind the gender funding gap and questioning how capital is allocated across the startup landscape.

Here’s a spotlight on recent reports, articles, and perspectives that shed light on gender diversity in venture capital.

📄 Article | 21 female founders and operators to watch in the Nordics

Although women remain underrepresented in startup founding teams, a new wave of female founders and operators is beginning to reshape the ecosystem.

Sifted identified 21 women across the Nordics who are building influential startups or playing key roles in scaling major tech companies, highlighting the growing presence of women across sectors such as AI, healthtech, climate tech, fintech, and developer tools.

Read the article

📝 Report | CVC does better than the rest of VC in gender balance

Corporate venture capital (CVC) appears to be making more progress on gender diversity than the broader venture capital industry. According to a recent Global Corporate Venturing benchmarking survey, about 43% of CVC teams are either gender-balanced or majority female, compared with only 31% of teams in the wider VC sector.

Despite this progress, gender inequality still exists within the industry, particularly at senior levels. Women are more commonly represented in early-career or mid-level positions, while leadership roles remain heavily male-dominated.

Read the report

To understand how this shift is shaping early-stage investing, we spoke with Patricia Pastor, General Partner at Next Tier Ventures. Patricia focuses on backing founders who are building AI-native companies where the technology is at the center of the product.

In our conversation, she explains what makes AI startups stand out today, how investor expectations around AI funds have changed, and where she sees the most promising opportunities as the industry continues to grow.

Artificial intelligence is becoming the foundation of many new software companies. Instead of adding AI as a feature, founders are now building products where AI is at the core of the system. As this transition continues, investors are focusing on teams that can turn powerful technology into scalable and defensible businesses.

We asked Patricia Pastor about what first drew her to AI investing and what she looks for in founders building AI-native companies today.

What initially drew us to this space was the profound shift in technological power—the realization that AI isn’t just a tool, but a catalyst that redefines human potential at every level.

However, as the market matures, we’ve found that the real difference-makers are founders with a ‘Full-Stack Obsession.’ Being a model expert is a great start, but we back leaders who think deeply about infrastructure and operational excellence. We are particularly inspired by the vision of Sovereign AI: companies that empower enterprises to own their intelligence and their data.

We look for founders who help businesses move away from ‘renting’ their core technology and instead build it as a strategic IP asset. In an era where privacy is the ultimate gold standard, the winner is the founder who builds a fortress around the client’s data perimeter.

Is there an AI vertical or application you believe is meaningfully underappreciated by the market today?

Our thesis has evolved from exploring ‘AI as a feature’ to championing AI as the new foundational architecture of software. The world has moved past the stage of simple enhancements.

We are no longer looking for functionality that can be disrupted by a single model update. Instead, we invest in defensible architectures. We focus on companies where AI isn’t just an add-on, but the very DNA of the system—solutions that are robust, efficient, and built to thrive as the industry scales.

What Is The LP POV in This Sector?

Over the past few years, artificial intelligence has attracted a wave of investor attention. But as the market matures, limited partners are becoming more selective and are asking deeper questions about how AI companies create long-term value.

We asked Patricia how LP expectations around AI-focused funds have evolved and what new concerns or opportunities are shaping investor conversations today.

We’ve seen a healthy evolution from ‘AI curiosity’ to ‘AI maturity.’ Two years ago, the goal was simply to get a foot in the door; today, our LPs are looking for sustainable value.

They are asking the tough, necessary questions: ‘How do these companies stay resilient if the big labs slash their prices?’ or ‘How does the regulatory landscape, like the EU AI Act, become a competitive advantage rather than a hurdle?’

The most exciting part is that the capital is becoming more sophisticated. We are seeing ‘smart money’ that realizes the real prize isn’t just the model—it’s how the AI is woven into the workflow and fueled by proprietary data. It’s no longer about who has the AI, but who builds the most enduring value with it.

Early-stage Fundraising & Execution

For many AI startups, raising capital in the early stages poses unique challenges. Founders are often navigating rapid technological change while also building a sustainable business model.

We asked Patricia about the most common mistakes she sees from AI founders when raising capital and what truly differentiates strong teams at the pre-seed and seed stages.

The most frequent trap is losing sight of the business fundamentals in the rush for growth. In the early days, it’s easy to overlook unit economics, but we believe that traction is only meaningful if it’s sustainable.

We see many teams unintentionally letting their margins be squeezed by external compute costs without a clear roadmap for efficiency.

From an investor’s perspective, what really differentiates strong AI startups at pre-seed and seed today?

What truly sets a pre-seed or seed team apart today is Architectural Empathy. We are drawn to founders who are not just brilliant at coding, but brilliant at designing for scale and cost-control from day one.

The winners are those building proprietary assets—teams that know how to own their intelligence rather than just renting it. That strategic foresight is what turns a great project into a generational company.

The Role of Geography & Ecosystems

AI innovation is happening across multiple regions, each with its own strengths and challenges. While some ecosystems benefit from access to capital and talent, others are emerging as strong hubs for applied AI and specialized expertise.

We asked Patricia how she compares different regions for building AI companies and where she currently sees the strongest momentum.

You invest across Europe, North America, and LatAm. How do you compare these regions in terms of AI talent, ambition, and company-building maturity?

We invest in companies that are “born global,” but each region has its own DNA:

• USA: Unbridled ambition and infinite capital, but often with absurd operational and talent costs.

• Europe: Superior technical talent and a clear regulatory advantage.

• LatAm Pure pragmatism. They know how to apply AI to solve real inefficiencies in traditional sectors with highly efficient budgets.

Are there specific markets or ecosystems where you’re currently seeing disproportionate momentum in AI?

The reality is that we are witnessing the first truly borderless technological revolution. Momentum isn’t just happening in specific cities; it’s happening wherever there is a high density of computer and specialized talent.

We’re seeing disproportionate momentum in vertical AI (health, legal, finance), where models are embedded directly into workflows and deliver measurable ROI. There’s also strong traction in AI agents for back-office automation and in AI-native cybersecurity.

Geographically, the most interesting ecosystems right now are SF/NY for agents and infra, Israel for cyber, and Southern Europe for applied B2B AI, where competition is lower and domain data is a real moat.

How do regulatory, cultural, or market structures shape how AI startups scale across these regions?

In Europe, we see that compliance with GDPR and the AI Act has shifted from being a hurdle to becoming a competitive advantage for Enterprise sales.

Global corporations (Banking, Insurance) prefer buying European software because it guarantees security and compliance “out of the box”—something that is sometimes missing in solutions from other markets.

Looking for Signal vs. Noise in AI

With artificial intelligence dominating headlines and attracting large amounts of capital, it can be difficult to separate real opportunities from hype. Investors are increasingly focused on identifying businesses that solve meaningful problems and can build long-term advantages.

We asked Patricia where she sees genuine opportunity in the AI landscape and which areas may be attracting more attention than they deserve.

The market is saturated with noise in the generic application layer (”wrappers”). For us, the ‘signal’ lies in two areas: Orchestration and Verticalization.

The genuine opportunity is in operational infrastructure. Poor base management and planning can kill a startup. That is why we bet on Intelligent Orchestration: tools (like Optiak in our portfolio) that act as a ‘GPS,’ deciding which model to use at any given moment to optimize costs and avoid vendor lock-in.

Is there an AI vertical or application you believe is meaningfully underappreciated by the market today?

One of the most underappreciated AI verticals is automating internal operations in traditional sectors (industry, logistics, non-clinical healthcare, public sector).

While the market focuses on generic copilots, the real value lies in replacing entire processes, leveraging proprietary data, delivering clear ROI, and creating high barriers to entry.

The next winners won’t be better chatbots—they’ll be systems that redefine how organizations operate from the inside.

Conversely, what parts of the AI landscape feel overcapitalized or premature?

Today, the market is clearly overcapitalizing horizontal copilots: productivity assistants, generic content generators, and “enhanced” chatbots.Many of these products are saturated, rely on easily replicable public data, and have low barriers to entry, making it hard to build defensible businesses.

Additionally, some highly futuristic AI applications, like AGI for complex tasks, are still premature: lots of hype, massive investment, and uncertain returns. In short, too much capital is chasing short-term promises instead of solving real operational problems inside companies.

Looking Ahead at 2026

As AI adoption accelerates, the next few years are likely to bring major changes in how companies build and deploy intelligent systems. New technologies, infrastructure, and business models are already beginning to influence the market.

We asked Patricia where she expects the strongest growth to happen in the near future and which risks founders and investors should pay closer attention to.

Which areas within AI do you expect to see the strongest growth over the next 12–24 months?

We are moving toward a world of Zero-Touch Intelligence. The next 24 months won’t just be about smarter apps, but about a fundamental shift in how the digital world breathes:

• The Rise of Autonomous Infrastructure Agents: We are backing the birth of the ‘Self-Healing Enterprise.’ Imagine a world where AI doesn’t just assist humans, but independently orchestrates servers and neutralizes cyber threats in real-time, without human intervention. This is the end of reactive maintenance and the beginning of autonomous resilience.

• The Edge & Local AI Consolidation: The future of AI isn’t just in the giant, distant cloud; it’s happening right where the action is. We are seeing a massive shift toward Edge Intelligence—small, hyper-powerful models running on private servers and local devices. By slashing latency and compute costs, we are moving from ‘Centralized Intelligence’ to ‘Sovereign Performance.’

The Bottom Line: At Next Tier, we invest in the architects of this transition. We are moving from AI that talks to us, to AI that works for us, silently and securely, at the very edge of the network.

As capital and competition accelerate, what risks, technical, commercial, or ethical, should founders and investors be paying more attention to?

We believe the AI ecosystem is entering a phase of much greater discipline. Two structural risks are becoming increasingly clear.

• First, model dependency. The base model layer is evolving extremely fast and becoming increasingly commoditized. If a company’s only advantage is access to a specific model or API, it is very difficult to build a durable business. What we look for instead are companies that create defensibility above the model layer — through proprietary workflows, domain expertise, unique data, or deep integration into customer operations.

• Second, compute economics. AI businesses are fundamentally constrained by infrastructure costs. Training and inference require significant compute, and for many startups the cost structure can quickly become unsustainable if it is not designed carefully from the beginning. As the market matures, we expect efficiency in architecture, model selection, and inference costs to become a major competitive advantage.

Beyond the technical layer, we also pay close attention to distribution and workflow ownership. In our view, the long-term winners will not necessarily be those with the most advanced models, but those that successfully embed AI into real business processes and become indispensable to their customers.

Last week at 0100 DACH in Vienna, one of the standout voices was Sion Evans, Managing Director at VenCap International. In our conversation, he unpacked what it truly takes to build an institutional-quality venture FoF programme in today’s environment. Drawing on nearly four decades of venture investing, he argued that manager selection remains the single most critical driver of repeatable alpha — and that over-diversification is often a hidden destroyer of returns.

He also detailed how secondaries, when used with discipline, can serve both as a structural liquidity tool and as a way to concentrate exposure to the top 1% of outcomes. Against the backdrop of AI-driven platform shifts and extended exit timelines, Evans makes a compelling case for focus, intellectual honesty, and long-term conviction as the foundations of sustainable venture performance.

From your perspective, what defines an institutional-quality venture FoF program today — in terms of repeatable alpha, liquidity management, diversification, and operational scalability?

The heart of any FoF programme is manager selection, manager selection, and manager selection. You need to venture managers who can repeatedly back the world’s very best entrepreneurs; otherwise, nothing else matters. The challenging thing is that these entrepreneurs have a choice on who they work with, and the market is hyper-competitive, even at the very earliest stages.

Once you’ve covered this essential point, it’s important to understand the liquidity constraints of your programme and reflect this in your portfolio construction. Early stage venture takes a long time, secondaries can provide near term liquidity, and venture growth somewhere in the middle. The way you combine these elements needs to be congruent with your liquidity needs, otherwise you’ll struggle over the long term.

Diversification is a hard topic when building a venture portfolio. Naive diversification will destroy a lot of value. You should track your exposure to sectors, stages, and geographies, but use this as a starting point for deeper analysis, not a target.

This is not a passive asset class, so you need to build significant in-house capabilities to manage operations, portfolio monitoring and other active management decisions that come up over a fund’s life. The job doesn’t stop once an investment decision is made.

Having invested in venture since 1987, what differentiates genuine top-tier access in primaries from perceived access in today’s competitive environment?

It’s about being able to construct the portfolio you want without making compromises or taking shortcuts. This requires a lot of intellectual honesty, as anything can be rationalised in the short term given the long feedback loops of the asset class. You’ll never be able to access all the managers you want, or in the scale you want - such is life. We solve this issue by sizing our funds around our projected investment capacity, not the reverse.

You focus on backing leading “unicorn hunters.” How do you balance manager concentration with the diversification required by institutional LPs?

I’d push back a bit here. The best managers don’t want to back companies worth $1bn, they want to generate $1bn in proceeds from a single investment. These are the big leagues. We now have multiple private venture backed companies in our underlying portfolio worth over $100bn, and one over $1tn, so these lofty goals aren’t just hubris.

We’ve learned the hard way that over-diversification kills returns in venture - the drop off from a top-tier to a second-tier firm is steep. If your main reason for making an investment is diversification, then don’t make it. Embracing concentration at the manager level is critical, and the very best managers will typically see you well diversified by sector stage and geography.

How do secondaries complement your primary program — are they primarily a liquidity tool, a way to enhance DPI, or a way to access managers you might not otherwise reach?

Secondaries play an important role in our primary programme in two ways:

1) Providing early liquidity to the programme, which can then be recycled or distributed. We effectively ladder our programme liquidity across secondaries, venture growth, and early stage venture

2) Concentrate capital into the very best private companies, typically by purchasing LP stakes in mature funds that have backed category-leading companies, or by participating in GP-led transactions around the same companies. VC is all about the top 1% of outcomes, any chance we can get to get more capital into these companies is one we take

In periods of exit slowdown and denominator pressure, how do you actively manage capital calls, distributions, and portfolio exposure across both primaries and secondaries?

Despite the industry trends, we saw robust liquidity last year, driven by companies like Scale, Figma, Circle, Dream Games, Netskope, Navan etc. The important thing for institutions managing these tensions is to stay consistent with deployment and not to try to time markets. If you know that you may have tighter liquidity demands, then increasing your allocations to secondaries or venture growth, relative to early-stage venture, would likely be prudent.

Given that most venture returns come from a small number of early-stage outliers, how do you ensure sufficient exposure to early-stage convexity while maintaining portfolio-level liquidity discipline?

I don’t see a trade-off here. Both secondaries and venture growth are also driven by the top 1% of exits and demonstrate similar levels of convexity - as well as loss ratios at the company level. You must approach all aspects of your venture programme through the lens of the very best companies, otherwise you will likely be disappointed by the outcome.

How central is re-up strategy in your portfolio construction, and under what circumstances do you choose not to continue with a previously backed GP?

We actively manage our portfolio, but expect a very high level of re-ups due to our manager concentration. We run a full diligence process for every fund, whether it’s a new relationship or a multi-decade one, but typically look to address any issues or concerns as they come up in real time. We’re always on the lookout for new managers, but don’t have any pressure to expand the portfolio, which is critical to decision-making incentives.

We typically fail to re-up with a manager for one of two reasons: 1) they fail to execute an effective generational transition, or 2) they are no longer able to consistently work with the very best entrepreneurs

With the surge in AI-dedicated funds, how do you assess specialist AI managers versus generalists incorporating AI in their thesis?

The answer is very straightforward, at the risk of sounding like a broken record: are they consistently working with the very best companies? In practice, we prefer working with generalist managers as we don’t think LPs can choose sectors. Our managers gave us early access to companies like OpenAI and Anthropic long before LLMs were obvious to us, as an example.

With a platform shift like AI, the designation of an AI specialist manager probably won’t make sense for much longer – if it makes sense now. We stopped talking about internet-focused funds as the technology became ubiquitous; the same is likely to happen here.

After committing over $3 billion across multiple cycles, what structural adjustments are necessary today to build a venture FoF portfolio that can deliver both top-quartile growth and controlled liquidity over the next 10–15 years?

The key learning for us is focus. AI is a platform shift, and we have invested through platform shifts before, be it cloud, mobile, or even the Internet. In all these prior shifts, returns were heavily concentrated in terms of both companies and funds, and we would expect the same to be true this time. The top 1% of exits make up the majority of the value in venture, and in AI, things are looking even more concentrated than historic norms.

We also see firms fail to remain relevant across these shifts, and new firms emerge to take their place amongst the top tier. Venture capital is not a place for complacency at any level of the stack.

For liquidity, we expect secondaries to become more prominent over the next decade and become a normal part of portfolio management. This will be a double-edged sword. A great portfolio construction tool to double down on the best companies and provide structural early liquidity, but also an avenue for low conviction investors, both VC and LP, so they sell their best companies too early. This is a grave error in venture, which will remain the ultimate long-term compounding asset class. You don’t make money in venture by selling your winners early, despite the short-term temptations.

Needless to say, a big part of our heart — and our team — is in the CEE region, so these words may carry a degree of subjectivity :).

For a long time, Eastern Europe was perceived as a smaller, developing segment of the tech ecosystem: strong engineering talent, lower operating costs, and smaller funding rounds. There was clear potential, but not always sufficient access to growth capital. Western Europe attracted most of the institutional attention, while the U.S. set the pace for trends and valuations. Meanwhile, CEE continued building — largely in the background.

This seems to change. Eastern Europe is no longer just “emerging.” Startups are raising larger rounds. Founders are thinking globally from day one. Investors are becoming more active and more selective. The region is gaining confidence and scale.

Today, we’re taking a closer look at how the region is evolving, through on-the-ground data, and insights from the investors and operators building it every day.

A Year of Consolidation for Eastern Europe

In 2025, startups across the region raised €3.6 billion through 1,034 transactions. That equals about 5.5% of total venture capital invested across Europe. The funding level shows resilience, especially given the broader slowdown in global venture markets.

At the same time, the region continues to operate below its potential. Eastern Europe represents roughly one-third of Europe’s population, yet it captures only a small slice of total venture funding. The gap isn’t about talent or technical ability; it reflects structural limits in capital availability and access to later-stage financing. The ecosystem is strong, but the funding base is still catching up.

Fewer deals, similar money

The change in 2025 is in the drop in activity. Total capital raised remained nearly flat compared to 2024 (€3.76B vs. €3.64B), but the number of deals fell significantly, from 1,307 to 1,034. That’s more than 250 fewer transactions year over year.

This tells us the next facts: fewer companies are getting funded, but those that do are raising larger rounds. Investors are becoming more selective, concentrating capital into startups with stronger traction, clearer growth paths, or more defensible business models.

It’s a move toward quality over quantity.

The strongest growth in round sizes happened at the earliest stages. Pre-seed investments increased by 45% year over year, while seed rounds grew by 43%. Even in a more cautious market, early-stage startups are managing to raise bigger tickets — a sign that investors are still willing to back new companies, but with greater discipline and higher conviction.

Poland Leads the Region — And Does It Differently

If CEE has an anchor market, it’s Poland.

The country continues to position itself as the anchor of Central and Eastern Europe’s tech ecosystem. In 2025, the total value of the Polish tech ecosystem reached €56.5 billion, marking steady long-term expansion.

Since 2019, the ecosystem has grown 2.8x, slightly above the CEE average of 2.6x, placing Poland among the region’s stronger large markets. It now accounts for 26% of total CEE enterprise value, making it the region's single largest contributor. In fact, Poland’s ecosystem is as large as the next two biggest CEE markets combined.

Poland’s momentum in 2025 is also visible in its funding activity.

Startups raised €786M across 182 transactions, a sharp increase in capital compared to the previous two years, even as deal count remained below 2023 levels. This shows the broader regional trend: more capital concentrated into fewer, larger rounds. The ecosystem is clearly maturing, with investors backing companies that are further along in their growth journey.

Capital allocation in 2025 shows a strong tilt toward later-stage funding. Around €249M was invested at early stages, while approximately €537M went into later-stage rounds. Series C alone represented the largest share (27.3%), followed by Series B (20.7%) and Series E (20.3%).

Early-stage rounds still play an important role; seed accounted for 16.3% and Series A for 13.2%, but the real acceleration is happening at growth stages. At the same time, average ticket sizes remain healthy, with seed deals averaging about €1.9M and pre-seed rounds around €203K.

Greece’s Startup Ecosystem Steps Forward

If Poland represents size, Greece represents acceleration.

Greece’s startup ecosystem also had a strong momentum in 2025, with more than €732M invested across 95 deals, a 35% increase from 2024. Funding was spread across over 90 startups, supported by a growing base of capital providers, including 18 VC funds and 10 additional investment platforms actively targeting Greek companies.

The market is also becoming more international, with over 143 unique investors from around the world participating in funding rounds, highlighting Greece’s increasing visibility on the global stage.

Early-stage activity remains the backbone of the ecosystem, with pre-seed and seed rounds accounting for 75% of all deals. At the same time, later-stage funding is gaining weight: Series A and above represented 25% of transactions and attracted more than €600M, signaling greater market maturity.

The largest deal of the year was Spotawheel’s €300M mixed round (Series C and venture debt), underlining the rise of alternative financing instruments. AI, SaaS, and HealthTech led sector funding, while Defence Tech is emerging as a distinct vertical, underscoring a market diversifying and evolving beyond its early-stage roots.

Bulgaria Steps Into a Growth Phase

Among smaller markets, Bulgaria stands out.

The local ecosystem delivered one of the strongest growth stories in the region in 2025. Startups raised €233M across 23 transactions, a sharp increase compared to 2024, despite a slightly lower number of deals. The jump in total funding was driven by larger rounds and the rise of companies such as EnduroSat and Dronamics.

Capital distribution shows balanced growth across stages. Around €104M was invested at early stages and €129M at later stages, signaling progress in both company creation and scaling. Series B dominated the funding landscape, accounting for over half of total volume (55.1%), followed by Series A (29.6%), with seed accounting for 14.2%.

Bulgaria also stands out on a per capita basis.

Between 2020 and 2025, the country recorded 76 funded startups per million people, four times the SEE regional average of 19 and more than double runner-up Romania (12). In absolute numbers, Bulgaria leads the region as well, with 489 funded startups, nearly 2x more than Romania’s 228.

The broader SEE ecosystem reached 1,069 funded startups during this period, with Bulgaria accounting for a significant share. Much of this activity is concentrated in application and system software (42%), followed by other sectors such as financial services, healthcare, transport, and gaming, highlighting both scale and sector diversification within the Bulgarian startup landscape.

🗓️ Event Spotlight: 0100 Emerging Europe 2026

As the CEE ecosystem continues to mature, the conversation moves beyond capital volumes and into long-term strategy. That’s exactly what 0100 Emerging Europe 2026 is built for. Now in its 15th edition, the event brings together investors, fund managers, and advisors focused on private markets across the broader CEE region.

It has become a go-to meeting point for decision-makers looking to build relationships, exchange insights, and shape the next wave of growth in Emerging Europe. Whether you’re raising funds, deploying capital, or exploring new partnerships in the region, this is where the CEE private markets community gathers.

With curated sessions, high-level speakers, and a strong investor presence, 0100 Emerging Europe 2026 offers direct access to the people driving the region’s next chapter.

Learn more

For most of the last decade, venture capital has been built around speed. Deeptech never really fit that model.

Companies working on new materials, energy systems, robotics, or life sciences take years just to reach technical proof. And success depends on whether the technology actually works, not whether users click fast enough.

Because of that, deeptech was often seen as “too hard” for venture. But in recent years, that view seems to be changing.

Why DeepTech Is Becoming Europe’s Venture Opportunity

DeepTech is gaining momentum in Europe because it plays to the region’s natural strengths. Europe has a long history of excellence in science, engineering, and industrial innovation. In the 1970s and 1980s, this translated into strong economic growth driven by manufacturing and advanced industrial systems. But when the internet and consumer software wave took off in the 1990s, Europe fell behind the US in building global tech champions. As a result, economic growth slowed.

Today, DeepTech offers Europe a chance to re-enter the innovation race by turning its research institutions, talent base, and industrial know-how into scalable companies.

At the same time, global data shows a clear link between innovation and economic growth. Countries that have invested heavily in innovation, such as the US, China, Israel, and Singapore, have seen stronger GDP growth over the past two decades. Europe, by contrast, has underinvested in turning research into market-leading companies. DeepTech sits at the center of that gap.

It covers areas such as energy, climate, robotics, biotechnology, and advanced manufacturing, sectors in which Europe already produces world-class research but has historically struggled to commercialize it at scale. Venture capital is increasingly focused on closing that gap.

This is why DeepTech has become such a hot topic for European venture investors right now. Beyond returns, it addresses broader questions: economic competitiveness, energy independence, food security, and national defense.

The European Markets That Are Already Making DeepTech Work

France, Sweden, and the United Kingdom stand out as core drivers of deep-tech momentum, consistently outperforming other European markets across key indicators, including total funding, late-stage capital, debt financing, and the number of university spin-offs. Together, these countries demonstrate what’s possible when strong research ecosystems are paired with capital that’s willing to remain committed beyond the early stages.

Sweden is a particularly strong example of how policy, capital, and long-term thinking can reinforce each other. Today, 65 percent of all startup funding in Sweden goes into deep-tech companies—more than any other European country.

A big reason is the role of institutional capital: Swedish pension funds allocate to venture at roughly twice the European average, helping deep-tech companies access both equity and debt earlier and more consistently. As a result, Sweden leads Europe not just in early funding, but also in late-stage deep-tech financing, where many countries still struggle.

Why European LPs Are Leaning Into DeepTech

European limited partners are showing strong, growing interest in deep-tech venture funds, as the data makes clear. In 2024, deep tech ranked just behind generalist funds in LP due diligence activity, ahead of many other popular strategies such as sustainability, secondaries, and pharma.

DeepTech companies consistently raise more capital than traditional tech companies at every stage, and the gap is especially pronounced among the strongest performers. From seed through Series B, top-quartile deep-tech startups in Europe raise larger rounds than their regular tech peers, reflecting higher capital needs for R&D, infrastructure, and longer development cycles.

Investors are willing to commit more capital earlier when they believe the underlying technology can support large, defensible outcomes. By Series C and beyond, the difference narrows at the median, but the best deep-tech companies still pull ahead, showing that when deep-tech works, it attracts disproportionately large checks and sustained investor conviction.

Deep-tech startups in Europe are also reaching unicorn status faster than traditional tech companies, on average, in about six years versus nearly eight for regular tech. Strong intellectual property, long-term industry partnerships, and continued access to capital help these companies scale more quickly once key technical milestones are reached.

For LPs seeking both differentiation and durable returns, deep tech is increasingly regarded as a compelling component of the venture portfolio.

What Investors Are Betting on in DeepTech for 2026

Limited partners in the region have been actively diligencing deep-tech funds, signaling confidence that breakthrough scientific and engineering companies can deliver durable outcomes across markets. That confidence is backed by capital: recent data show European deep-tech startups raised roughly €13 billion in 2025, with robotics and hardware leading the way.

One example of this change is the surge of new deep-tech funds closing large vehicles in Europe. Spanish firm Kembara recently secured a €750 million first close toward what could become a €1.25 billion growth fund dedicated to scaling deep-tech champions — a notable milestone given the tough fundraising climate.

Similarly, Paris-based VC daphni closed its latest daphni Blue fund at €260 million to turn Europe’s scientific strength into startups focused on environmental and societal challenges. On the earlier-stage side, Copenhagen-based The Footprint Firm closed its €76 million Footprint Fund I, targeting early-stage deep-tech ideas in the energy and climate sectors across Northern Europe.

🗓️ 0100 DACH Panel Spotlight: Deeptech as a Strategic Asset Class

From AI and robotics to biotech and advanced hardware, deeptech is increasingly viewed not just as a technology play, but as a strategic asset class capable of generating durable, defensible value over time. This panel is one of the key conversations at 0100 DACH 2026, unpacking what this means for venture capital.

Bringing together Daisy Cai (General Partner at B Capital Group), Igor De La Sota (Founder and General Partner at Cardumen Capital), Roland Dennert (Managing Partner at Cipio Partners), and Christian Noske (Partner at NGP Capital), the discussion will explore how investors across venture, growth equity, and private markets are approaching deeptech today.

Learn more

🌍 Across the Ecosystem | Thoughts on DeepTech as an Asset Class

Venture capitalists, growth investors, limited partners, policymakers, and corporates are increasingly aligned on the opportunity deeptech represents: channeling long-term capital into technologies that can drive durable economic growth, industrial resilience, and strategic autonomy.

At the same time, market participants acknowledge that deeptech comes with its own set of challenges. Capital intensity, longer development cycles, regulatory complexity, and the scarcity of late-stage funding remain key constraints—particularly in Europe. Questions around fund size, ownership strategies, and how to support companies through the scale-up phase are now central to the debate. Below is a snapshot of how the discussion around deeptech as an asset class is evolving across the European venture ecosystem.

📄 Article | Closing Europe’s deep tech gender gap

A new EU-backed study highlights how Europe’s deep-tech gender investment gap remains wide and structurally embedded, with real consequences for the technologies the continent will be able to scale. Deep tech—spanning areas like AI, climate and energy systems, semiconductors, robotics, and biotech- is critical to Europe’s economic resilience, security, and industrial competitiveness.

Yet despite strong representation of women in research and science, that presence drops sharply once companies move into venture funding. Today, startups with at least one woman founder receive only a small share of venture capital, and the imbalance is even more pronounced in deep tech, where most funding flows to all-male founding teams.

Read the article

📄 Article | 18 Deep Tech Startups from CEE You Should Keep an Eye On

Deep tech has emerged as one of the most resilient and strategically important segments of Europe’s startup ecosystem, and Central and Eastern Europe (CEE) is increasingly central to that story. The CEE region reflects both the promise and the challenge of deep tech in Europe. It is home to strong research institutions, technical talent, and a growing pipeline of early-stage startups working on highly specialized technologies.

Many of these companies are still at the pre-seed or seed stage, building defensible IP and validating complex products that require significant upfront investment and longer timelines to revenue.

Read the article

When Venture Capital Stopped Going Early

By 2017, something fundamental had changed in venture capital. As Fridtjof Verge explains, the industry had gradually moved away from its original mandate. Early venture—once known as adventure capital—had become increasingly cautious, waiting for traction, metrics, and de-risked rounds.

The result? Founders at inception—the moment of highest uncertainty and highest potential—were often left without capital or meaningful support.

Antler was founded as a deliberate response to this shift. Its thesis was simple but contrarian: if venture capital creates the most value by backing people early, then the industry needed to move earlier, not later.

The Antler Way: Founder-First from Day Zero

At the core of The Antler Way is a strict founder-first philosophy. Every major decision at Antler is stress-tested with a simple question: Would this be genuinely helpful for founders?

This mindset shaped a unique model. Rather than sourcing finished startups, Antler works with individuals at the very beginning—often before teams, products, or even clear ideas exist. Founders enter a highly competitive, structured build phase where they form teams, test ideas, pivot fast, and ultimately receive Antler’s first institutional cheque.

This approach restores venture capital’s original role: enabling ambition when risk is highest, and support matters most.

Scaling Fast—But Sustainably

Operating across 27 cities on six continents, Antler has grown rapidly—but not carelessly. Fridtjof emphasizes that speed without sustainability rarely compounds.

Antler standardized what must be consistent:

• Early-stage investment processes

• Founder support frameworks

• Brand, culture, and internal systems

At the same time, local teams retain autonomy to adapt execution to their ecosystems—whether that means different founder outreach channels, market pacing, or capital dynamics.

The result is a global platform that scales without losing local relevance. As Fridtjof puts it, scaling fast is easy; scaling sustainably is the real challenge.

From Thousands of Applications to High-Conviction Bets

Each Antler cohort attracts between 2,000 and 5,000 applicants per city, with only around 3% accepted. The average founder is in their early 30s, typically bringing prior operating, technical, or entrepreneurial experience.

When selected founders are placed in a high-density environment with equally driven peers, something powerful happens: co-founder teams form organically, ideas evolve rapidly, and conviction is forged under pressure.

Antler then invests at inception—becoming the first institutional backer at the moment companies truly begin.

Data as a Structural Advantage

With thousands of founders passing through its programs globally, Antler has quietly built one of the richest datasets on early-stage entrepreneurship.

This data increasingly informs founder selection and investment decisions, helping identify patterns linked to follow-on funding, valuation growth, and resilience. While human judgment remains central, data now plays a growing supporting role—especially at Antler’s scale.

Over time, this may become one of the firm’s most durable competitive advantages.

Impact as a Question of What You Solve

For Antler, impact is not defined by early-stage ESG compliance. At inception, such frameworks are often impractical. Instead, impact is evaluated through a simpler lens: what problem does this company solve?

Does the solution meaningfully address environmental or societal challenges—directly or indirectly? Can its outcomes be measured as the company matures?

Around 40% of Antler’s portfolio is internally classified as impact-driven. More tellingly, Antler’s internal data shows that startups scoring higher on sustainability practices are more likely to raise follow-on rounds and do so at higher valuations.

Impact, in this model, is not philanthropy—it is a signal.

Lowering Barriers, Broadening Access

By opening access at the idea stage and operating globally, Antler reduces many of venture capital’s traditional biases—geographic, network-driven, and socio-economic.

This enables founders from less mature ecosystems to access capital, peers, and global networks that would otherwise be out of reach. In that sense, The Antler Way is not just a venture model—it is infrastructure for entrepreneurial inclusion.

Back to the Roots of Venture Capital

Eight years on, with over $1.2bn in AUM, Antler’s core conviction remains unchanged: venture capital works best when it starts early, backs people first, and compounds learning globally.

In a market that once drifted away from risk, The Antler Way represents a return to first principles—rebuilding venture capital from day zero.

Learn more about The Antler Way to scaling fast in a sustainable way in Antler’s recently published Sustainability Report 2025.

Last week, the European Commission announced the launch of EU INC., a proposed pan-European company structure commonly referred to as the “28th regime.” The initiative was unveiled by Commission President Ursula von der Leyen at the World Economic Forum and is intended to simplify the creation, financing, and scaling of startups across the European Union.

While the announcement itself was brief, the implications are not. EU INC. represents a potential shift in how Europe approaches company formation and cross-border growth, moving away from nationally fragmented frameworks toward a single, optional corporate layer at the EU level.

In the days following Davos, the proposal triggered a strong response across the startup and investment ecosystem, combining cautious optimism with pointed questions around execution.

A New Legal Framework for European Startups

The initiative is intended to simplify how startups are created, financed, and scaled across the European Union, addressing a problem that founders and investors have raised for years.

EU INC. would introduce a single, optional legal entity operating under EU law, designed to coexist with existing national company structures rather than replace them. The objective is to reduce regulatory fragmentation for startups operating across multiple member states.

What the 28th regime proposes

According to the Commission, EU Inc. would include:

• A unified EU-wide legal entity to enable cross-border incorporation and operations

• A central, fully digital EU registry allowing company formation within 48 hours

• Standardised investment documentation to support cross-border fundraising

• A harmonised stock option framework for employees across the EU

The proposal is the result of sustained advocacy from the EU-Inc policy movement, which has gathered more than 22,000 signatories from across the European startup and investment ecosystem. Legal proposals were submitted to the Commission in early 2025, followed by consultations with EU institutions and member state governments.

Why the Ecosystem Is Pushing for This—Now?

The announcement of EU INC. has prompted a strong response from across Europe’s startup and investment ecosystem, reflecting long-standing frustration with regulatory fragmentation rather than enthusiasm for a new policy label. Founders and operators broadly agree that existing national company structures make it difficult to raise capital, hire across borders, and scale efficiently within the EU single market.

Ricardo M., Founder and CEO at wede, described the initiative as an acknowledgement that Europe’s corporate framework has become “fragmented, slow, and uncompetitive” for startups and scaleups. He also highlighted the importance of timing, noting that companies cannot afford extended implementation timelines, as capital and talent increasingly move to jurisdictions where incorporation and scaling are faster and more predictable.

Others have focused on execution rather than intent. Sascha Nievelstein points to incorporation processes that still take weeks in several member states, requiring notary appointments, paper documentation, and local-language filings.

From this perspective, the relevance of EU INC. will depend on whether it delivers a fully digital, standardized process that removes friction in fundraising, equity issuance, and cross-border expansion, rather than adding another optional layer to an already complex system.

From an investor perspective, EU INC. is increasingly being framed as a long-overdue attempt to offer a European equivalent to the Delaware C-Corp—a structure that became the global default not because of geography, but because it is fast, standardised, predictable, and easy to invest in. European founders and investors have relied on U.S. company forms for years for precisely these reasons.

We see real excitement across the venture industry about EU-INC finally getting implemented, with many seeing it as a long-awaited step that could make Europe a far more attractive, scalable, and investable place to build global companies.

The underlying test for EU INC. will be whether it can replicate that simplicity. If a pan-European structure is genuinely straightforward to set up and finance, many investors indicate they would be willing to switch and actively encourage founders to adopt it.

At the same time, there is broad recognition that EU INC. represents only the first layer of reform. A 28th regime may sit outside national company laws, but it remains closely connected to local tax, labour, accounting, and judicial systems. For the structure to work in practice, it will require supporting infrastructure and consistent enforcement across member states.

At its core, the EU INC proposal addresses a long-standing structural issue in Europe’s startup ecosystem. That is why the idea of treating Europe as a truly single market resonates so strongly across the ecosystem. As Diva Tommei mentioned in our recent conversation:

Her comments echo a widely held view across Europe’s startup and investment ecosystem: the priority is not to create another legal construct, but to make Europe the default place for companies to scale. Too often, startups are forced to look beyond the continent before fully exhausting the European market, not by choice but by necessity.

Watch the full interview

Fragmented rules continue to slow growth.

In this context, any EU-level company structure will be judged on a single criterion: whether it materially reduces fragmentation and allows Europe to function as a true single market in practice, rather than in principle.

Can The 28th Regime Override National Bureaucracy?

There is still a lot of skepticism around the proposal and about whether it can realistically bypass entrenched national systems, especially the power of public notaries and local administrative rules, which are deeply embedded in several EU countries. As one founder expressed his concerns on LinkedIn:

The concern is that Europe’s most entrenched barriers to startup formation are not abstract rules, but nationally mandated processes enforced by law. In countries like Italy, Spain, and many others in Eastern Europe, opening a company or many other similar actions still require in-person appearances before public notaries, physical signatures, and locally filed documentation, often in the national language. These requirements are not procedural preferences; they are embedded in national company law and protected by regulated professions with significant influence.

Beyond incorporation mechanics, there is also uncertainty around how EU Inc. will interact with national fiscal and labor frameworks, and founders raise similar concerns:

The question, then, is whether EU Inc. can operate above these systems rather than alongside them. Unless the 28th regime allows founders and investors to incorporate, amend governance, and execute transactions without triggering local notary involvement or duplicative national procedures, it risks becoming an additional layer rather than a replacement.

What Happens Next for EU INC?

EU Inc. has now entered what proponents describe as its “hot phase.” According to Andreas Klinger, the European Commission is expected to publish its formal proposal for implementing the 28th regime in March, under the leadership of Justice Commissioner Michael McGrath. At this stage, the debate has moved beyond whether a pan-European company structure should exist and toward how it will be designed and executed.

The coming weeks will be decisive. While political agreement to advance EU Inc. appears to be in place, the practical details are still being negotiated. The final proposal will signal whether the EU is prepared to deliver a genuinely pan-European corporate infrastructure, or whether the 28th regime risks becoming another well-intentioned framework constrained by compromise.

The proposal is expected by the end of March and will offer us a concrete look at whether EU INC. is positioned to function as a scalable, widely adopted alternative to national company forms.

🌍 Across the Ecosystem | EU INC & the 28th Regime

In the days following the announcement in Davos, conversation across Europe’s startup and investment ecosystem has shifted quickly from whether a pan-European company structure is needed to how it will work in practice. Founders, investors, and policy groups are broadly aligned on the problem EU INC. is trying to solve, regulatory fragmentation, but opinions diverge sharply on implementation, timelines, and trade-offs.

Below is a snapshot of how the debate is unfolding across the ecosystem.

🗞️ News | Too American? Brussels’ embrace of US corporate jargon sparks language row

European Commission President Ursula von der Leyen suggested calling the proposal “EU Inc.” during a speech in Davos, instead of its technical name, the “28th regime.” That idea immediately upset several EU lawmakers, who argue that “Inc.” is a U.S.-specific legal term and a bad fit for Europe, especially given rising anti-American sentiment and tensions with the U.S. under President Donald Trump.

Critics say the name reflects a broader trend of EU leaders adopting U.S. corporate and political language, like calling laws “Acts” (such as the Digital Markets Act and AI Act), which some see as abandoning Europe’s legal and cultural traditions.

Read the article

🎧 Podcast | Europe’s Plan to Finally Unleash its Startups | 28th Regime with Greta Koch & Iwoana Biernat

In a recent LuminaTalks episode, policymakers and ecosystem advocates unpack the rationale behind EU INC. and the proposed 28th regime, framing it as a potential turning point for how startups are built and scaled across Europe.

The discussion focuses less on announcement optics and more on structural constraints—why fragmented company law, slow incorporation processes, and uneven governance frameworks have limited Europe’s competitiveness, and what a unified corporate layer could change in practice.

Watch the discussion

As venture capital recalibrates around capital intensity, geopolitics, and long-term value creation, deep tech has moved from the margins to the center of strategic investing. Few investors have a clearer global vantage point on this shift than Daisy Cai, General Partner at B Capital, whose work spans deep tech, healthtech, and frontier technologies across the US, Europe, and Asia.

In this conversation, Cai unpacks what truly qualifies as “deep tech,” why longer R&D cycles can translate into stronger long-term moats, and how AI is increasingly embedded across hard-tech verticals—from robotics and autonomous systems to semiconductors and defense. She also reflects on the founder profiles, organizational models, and go-to-market strategies that separate promising science from scalable companies, and offers a comparative view of how deep tech ecosystems are evolving across regions.

Daisy Cai will expand on these themes on stage at 0100 DACH, where she will speak on the panel “VC Sector Focus: Deeptech, Healthtech, and Quantum — Europe’s Next Strategic Bets”, alongside Itxaso del Palacio of Notion Capital. The discussion will explore how venture capital is shaping Europe’s most strategically important sectors—and where the next generation of transformative companies is likely to emerge.

The term “deep tech” is used broadly. From your perspective, what qualifies a company as genuinely “deep tech” — and why does that distinction matter when underwriting risk, capital intensity, and long-term returns?

The “deep tech” label describes companies that are innovating at the frontier of a technical field, with the aim of developing and commercializing disruptive breakthrough technology

As we think about the profile of these deep tech startups, we generally see a longer period of research & development before a deep tech company is able to commercialize and go to market. This means that venture investors in deep tech startups take on significant technical risk, and often invest in companies years before they begin to generate revenue.

However, once these deep tech companies begin to commercialize, they often have far deeper technical moats than traditional software businesses, resulting in more durable revenue growth and market positions. Due to that deep technical differentiation, we often see successful deep tech companies continue to compound revenue growth at scale. Over the last 10 year cycle, some of the largest outcomes, including SpaceX, OpenAI, Anduril, and Groq are all deep tech companies.

Within deep tech, where do you currently see the most compelling opportunities, and what structural tailwinds are driving your conviction in those sectors?

Robotics, Chips, and Defense all benefit from strong tailwinds and disruptive technology trends. I have a high level of conviction that we’ll see generational businesses built across these three themes

Robotics is addressing labor shortages, which are becoming particularly acute in the US across factories, warehouses, and hospitals. The market opportunity in automating manual tasks across logistics, manufacturing, and healthcare is massive.

Robotics is also benefiting from AI breakthroughs, which are enabling new levels of dexterity and autonomous mobility. Over the next 2 decades, we’re going to see robots of all shapes and sizes automate huge swathes of the physical economy.

I see an incredibly exciting opportunity within robotic foundation models, where companies like Generalist, Skild, and Physical Intelligence are training AI models for robots, with the aim of delivering new levels of autonomy, dexterity, and mobility. These companies will form the new foundational software stack, which is likely to underlie the robotics revolution

Chips and other data center infrastructure, including networking equipment, are benefiting from the massive scale-up of AI data centers, which is creating shortages, bottlenecks, and problems that startups are well-positioned to address.

Optical networking presents a compelling opportunity to address a critical data transmission bottleneck in AI data centers. Traditional copper and ethernet networking approaches aren’t scaling in line with data center needs, creating an opportunity for optical networking startups to deliver far higher throughput networking equipment.

Defense tech startups across the US, Europe, and Asia are all benefiting from increased military spending. And in product categories like low-cost drones, AI-powered autonomy, and sensor fusion – existing defense primes aren’t well positioned to serve the government’s needs – creating a compelling opportunity for startups to emerge to fill those gaps.

AI is increasingly embedded across deep tech verticals rather than existing as a standalone category. How do you assess AI-enabled deep tech companies in terms of defensibility, proprietary data, and sustainable platform advantage?

It varies across different deep tech categories. On one hand, deep tech startups in the hard-tech fields like those designing satellites, rockets, chips, and networking equipment are using AI tools within their R&D process, resulting in faster product development, but aren’t necessarily embedding AI within their core products.

However, within other deep tech domains like robotics, drones, self-driving vehicles, or biotech, AI is a critical enabling technology. In robotics, for example, AI foundation models are enabling a new level of dexterity and locomotion, which is delivering faster deployments and more flexible robots to customers. Within drones and self-driving, AI is also core to the product, enabling autonomous navigation and movement. Within the public safety space, we’ve seen a few different companies – Verkada and Flock Safety – leverage computer vision & commercial off-the-shelf cameras to deliver a compelling solution to customers

Across all of those domains, data is incredibly valuable, and data collection over time can result in powerful compounding advantages. One of the most obvious examples of this is within self-driving, where Waymo and Tesla are both collecting enormous amounts of data off their fleets, resulting in structural advantages & moats that prevent competitors from entering their category

One of the defining challenges in deep tech is converting technical breakthroughs into scalable businesses. What specific founder attributes, organizational choices, or go-to-market strategies give you confidence a deep tech company can successfully commercialize?

If you look across the largest deep tech companies to succeed over the last 10 years, there’s quite a bit of variance in org structure and go-to-market strategy across different categories.

On one hand, we see the emerging trend of “full stack” deep tech companies like SpaceX and Tesla, which focus on vertically integrating both their supply chains and selling the final end product or service. Within Space, vertical integration has proven to be a winning strategy – with SpaceX producing ~85% of its components in-house, leading to radically lower production costs compared with the competition. Tesla is another canonical example of a company that focused on selling full electric vehicles directly to consumers, instead of trying to sell components to existing automakers

On the other hand, we’ve seen other companies succeed by partnering with existing ecosystem players on both the supply chain and go-to-market side – enabling faster paths to market. Within Defense, Anduril in the early days succeeded with a fairly capital-light approach, leveraging commercial off-the-shelf parts, and focusing their research and development on the AI and software layer – enabling them to get to market more quickly. Within Semiconductors, a company called Astera Labs, which develops connectivity chiplets, was founded in 2017, and partnered with Synopsys to license their IP and accelerate their tech development, enabling them to secure design wins in 2019, and start their first production run in 2020, blazingly fast in the world of chips – the company today is worth around $30B

So, as we think about organizational attributes, there are multiple models of success with some companies vertical integrating their supply chains and others leveraging off-the-shelf parts. We see some successful companies sell directly to end customers, and others sell components to large ecosystem platforms. We want to see an approach that is tailored to a company’s industry & end market.

On the founder side, we see a range of successful founder profiles, but generally, deep tech companies are founded by folks with technical backgrounds, who tend to skew older than founders of consumer or enterprise software startups

As a global investor with deep exposure to the US and Asia, how do you compare the venture ecosystems across the US, Europe, and Asia when it comes to deep tech — particularly in terms of founder ambition, engineering talent, capital depth, and customer traction?

Founders everywhere are ambitious. I think in the US, founders tend to be more vocal in positioning their startups as world-changing from day one, but we see ambitious, hard-charging founders in every geography.

I’m seeing different talent clusters in different regions. In the US, we’re seeing a strong talent pipeline in aerospace & defense coming out of SpaceX, Tesla, Anduril, and Palantir – building new startups in those verticals. We’re also seeing world-class semiconductor, biotech, and AI talent networks in the US give rise to exciting deep tech startups across those domains.

In China, we see world-class robotics startups like Unitree enabled by a low-cost, high-performance hardware ecosystem that continues to drive innovation. We’re also seeing Chinese biotech benefit from large biologist and chemist talent pools, and a more favorable regulatory landscape

Within Europe, we’re seeing climate tech companies attract significant talent and capital – and scale significantly. We’re seeing some interesting robotics startups emerging from ETH Zurich, which could scale over the next few years.

In terms of capital depth, the US still leads the world in growth-stage deep tech capital, with large multi-stage funds like B Capital, Founders Fund, Lux Capital, General Catalyst, and Andreessen Horowitz – all deploying hundreds of millions of dollars each year into growth-stage deep tech

Ultimately, customer traction is always a function of whether startups have developed a compelling solution to acute pain points, and we’re seeing companies across Europe, the US, and China build compelling products and scale up.

Looking ahead over the next two to three years, what do you expect to change most materially in deep tech investing globally?

As more mature deep tech companies go public, including Anduril, Waymo, and SpaceX in the US, and given the success of public deep tech companies like Oklo, Rocket Lab, Tesla, and Planet Labs, I’m anticipating increasing investor interest in deep tech companies

Additionally, we are seeing the talent pool for deep tech founders grow dramatically as the current wave of deep tech companies trains 1000s of young engineers to develop hardware products at the speed of startups

I believe that this convergence of young, hungry talent and venture investors looking to invest in the next great deep tech startup will result in a surge of deep tech company formation, some of which will undoubtedly go on to scale and reshape industries.

In this episode of 0100 Impact Talks, Ronja Stoffregen, Director of Corporate Venturing at REHAU New Ventures, explains how one of Europe’s largest family-owned industrial groups is rethinking how innovation reaches the real economy.

From Industrial Heritage to Innovation Imperative

Founded in 1948, the REHAU Group has grown into a global industrial leader in polymer-based solutions, with tens of thousands of products embedded in everything from construction systems and automotive components to medical devices and household appliances. Yet, like many industrial incumbents, REHAU faces accelerating pressure from digitalization, AI adoption, talent shortages, and operational complexity.

REHAU New Ventures was established as the group’s independent innovation arm to address precisely these challenges. While the unit has experience across venture building and corporate venture capital, its strategic focus has shifted decisively toward venture clienting—working with startups as customers rather than investors.

What Venture Clienting Actually Means

As Ronja explains, venture clienting is often confused with “fancy procurement.” In reality, it is something far more intentional.

REHAU does not take equity, dictate product roadmaps, or run experimental pilots disconnected from the business. Instead, it identifies concrete pain points inside its operating units and sources market-validated startup solutions capable of being deployed at scale. The goal is clear: measurable operational or revenue impact.

This model requires corporates to adapt—commercially, legally, and culturally—to the realities of working with young companies. It also demands that startups arrive with solutions ready for real-world deployment, not just experimentation.

Solving Real Problems: From Forecasting to Sales Automation

Among the concrete use cases discussed are AI-driven demand forecasting tools designed to reduce chronic over- and underproduction, as well as sales automation solutions that compress proposal cycles from weeks to minutes across complex, multi-country product portfolios.

In both cases, success is defined not by experimentation, but by adoption. Venture clienting forces innovation to prove itself against real constraints: data quality, legacy systems, compliance requirements, and economic impact.

Implications for Founders, VCs, and LPs

One of the most compelling insights from the conversation is the broader implication for the venture ecosystem.

For founders, venture clienting offers a faster path to validation, revenue, and resilience. For VCs, it represents a powerful—yet underutilized—mechanism to support portfolio companies beyond capital. And for LPs, it raises an important question: should capital increasingly flow toward strategies aligned with real industrial demand rather than abstract technological promise?

Ronja argues that innovation only creates impact when customers are willing to pay for it. Venture clienting, in this sense, becomes a bridge between venture capital, corporate strategy, and the real economy.

A More Mature Model for European Innovation

As venture markets mature and capital becomes more selective, the REHAU New Ventures approach reflects a broader shift: away from innovation theater and toward execution. It is a model built on commercial discipline, operational relevance, and long-term value creation.

For LPs, GPs, and corporates alike, venture clienting may not be the easiest path—but it may be one of the most effective.

AI is no longer a fringe technology—it is rapidly reshaping entire industries, from climate and energy to industrial operations and enterprise software. Yet as competition intensifies and barriers to entry fall, the question facing venture investors is no longer whether to invest in AI, but how to identify companies capable of generating durable, long-term value. In this interview, Jeremy Brown, Principal & Head of Climate at Anthemis, shares his perspective on evaluating AI businesses beyond the hype, drawing on his experience at the intersection of AI, climate, and complex industrial markets, and setting the stage for a broader discussion with fellow investors on where real opportunity—and real risk—now lies in AI venture capital.

In addition, Jeremy Brown will take the stage at 0100 DACH, where he will speak on the panel “Beyond the Hype: Capturing Real Value in AI Venture.” The discussion will bring together leading European investors to examine how the rapidly evolving AI landscape is reshaping venture returns, risk assessment, and long-term value creation. Alongside William Jilltoft, Director of Strategy and Operations at Northzone; Jimmy Fussing Nielsen, Founding and Managing Partner at Heartcore; and Sion Evans, Managing Director at VenCap, Jeremy will contribute a climate- and industry-focused perspective on where AI is delivering genuine, scalable impact—and where investor caution is increasingly warranted.

AI is attracting unprecedented capital and attention. From your vantage point, what are the most reliable indicators that an AI company is creating durable enterprise value, rather than riding a hype cycle?

It will become increasingly important for an AI company to define its core value proposition independent of any single industry. For example, is the platform or product designed for distributed assets, mission-critical operations, or field-based compliance? It’s important to have the operational DNA clear and look at adjacent sectors that demonstrate similar characteristics. There will be more scrutiny on AI-native and AI-powered marketed companies, so this will become increasingly important.

How do you think about AI investments at the infrastructure layer versus verticalized applications, particularly in complex sectors like construction, energy, and climate?

The key question is to what extent is the infrastructure an orchestrator, driving outcomes such that it enhances productivity and cost efficiency for the optimal amount of work? Verticalized applications will be a natural progression as larger industries figure out how they will adopt AI technologies at scale going forward – many infrastructure layers will be enablers of such verticalized applications.

With models and tooling becoming increasingly commoditized, where do you see true defensibility emerging in AI startups today—data, IP, workflow integration, regulatory complexity, or domain expertise?

Defensibility will be one in data & IP as well as an effective distribution strategy and manageable cost structure, which is impacting many AI companies right now. We are hyper aware about this. As such, we launched a not for profit in 2025 out of Cambridge, UK, called CommonAI, that is enabling AI startups to build from shared technical foundational IP protected under a strong IP framework as they build out their “secret sauce”. Think about it as creating ‘Virtual BigCos’ accelerating time to market for AI companies to compete in market faster. We’re also, through the platform, providing greatly reduced GPU costs to tackle the high COGS problem for many startups head on. This, alongside future domain expertise, will drive more defensibility.

From your experience in enterprise software and industrial environments, what are the biggest barriers to real AI adoption, and how should founders design products that get deployed at scale?

A founder really needs to understand his/her Complex, regulated customer ecosystem. Each customer base requires different procurement and compliance processes, which can complicate both organic and inorganic growth efforts over the first few years of product adoption. Also, deployment environments can be complicated given that some sites may be remote of off grid and interfacing with physical infrastructure is a challenge making operational execution extremely important. This elevates the growing need for service-led business models to sustain long-term growth. Customers frequently expect a blend of software and services to support technology implementation. A founder needs to balance the high margins of software with the high-touch trust of services to scale. Additionally, long sales cycles can slow down new product rollouts and market expansion, so resource planning and commercialization must be thought out well. Design flexible business models that can withstand or capitalize on changing market and policy environments.

When it comes to deploying AI in climate and industrial use cases, what are the most significant differences between Europe and the US—in terms of regulation, data access, customer readiness, and speed of adoption?

Both sides of the pond are looking at ways to re-shore manufacturing, and both are dealing with demographic pressures and labor shortages, but these are more acute in Europe. This gives way for immense opportunities in AI-driven industrial automation. Technology uptake has traditionally been stronger in North America, but we hope to see more European-grown technology champions over the next decade to increase speed of adoption. Europe is over-regulated, which stifles adoption and speed to scale. This is what we would like to be loosened over the next year to give European founders more ability to scale in Europe quickly as opposed to moving to the USA.

AI is often framed as an optimization tool in climate-related sectors. Where do you see AI enabling system-level change in the energy transition or industrial decarbonization, and how should investors assess whether that impact is both real and investable?

Surging energy demand, the acceleration of electrification, and the reshoring of manufacturing are driving a massive buildout of infrastructure and technology across the globe. Scale requires more than general SaaS guidelines and rinse-and-repeat playbooks. Facing long sales cycles, specialized use cases, and complex customer structures, companies at this stage need to have a tailored strategy that balances growth with deep customer trust, operational rigor, and durable revenue. Companies that can demonstrate his will pique investors’ appetites.

How do you think rapid AI development—especially in climate and industrial use cases—is reshaping the venture capital model itself, from fund construction to ownership targets and exit expectations?

Companies are staying private for longer – so the venture model is requiring different routes to achieve liquidity beyond a public listing. This includes a growing market for secondaries. The time horizon to exit for many climate and industrial use cases is longer than 10 years, so there are increasingly evergreen structure and longer fund lives (12+ years) to accommodate this reality.

With 2025 behind us and fresh capital decisions already underway, this is the moment when investors and founders can step back and see where money actually flowed. Looking at the full year removes the noise of individual deals and short-term headlines, revealing the changes that will shape venture capital decisions in 2026 and beyond.

What we can definitely say is that 2025 was not a year of hesitation in venture capital.

Venture capital in Europe finally started to recover after several difficult years. Total funding grew to about €66 billion, indicating that investor confidence was slowly returning. Still, the money didn’t spread evenly. Most of it went to a smaller group of top companies, especially in AI, where big deals dominated the year and set the market tone.

The differences between regions became clearer in 2025. The UK had a strong year, helped by major investments in AI and a few very large funding rounds. France and Germany, on the other hand, fell behind due to political uncertainty and a lack of growth-stage funding. Southern Europe stood out as the biggest success story, with funding jumping sharply as government support and startup programs helped the region gain real momentum.

Capital is Highly Concentrated at The Top

In 2025, venture capital became even more concentrated at the top of the market. A very small number of startups captured a large share of total funding, showing how money clustered around perceived winners.

In the U.S., just 10 companies took in more than 40% of all VC dollars, with most of that money going into AI-focused startups. This meant billions flowed to a handful of companies, while the majority of startups raised much smaller rounds or struggled to get funded at all.

This change was closely tied to how investors were writing checks. In 2025, the top 10 venture funds accounted for nearly 43% of all capital raised, the highest share in almost a decade. That happened even as the overall number of active investors and new fund entrants dropped sharply. Fewer players were writing checks, and those checks were getting bigger, as investors concentrated their bets on later-stage companies they viewed as safer or more likely to scale in an uncertain market.

The growing influence of the largest VC firms reinforced this pattern. While fundraising across the broader market stayed muted, established funds continued to attract the bulk of LP commitments and held the most capital ready to deploy.

Smaller and newer funds fell away, with new entrants declining to just a fraction of prior years. With scale, reputation, and dry powder on their side, the biggest firms were best positioned to lead large rounds—pulling capital further toward the top and deepening the divide between the market’s largest winners and everyone else.

More Unicrons, With a Big Asterisk

Another big story of 2025 was the return of unicorns. Many startups crossed the $1 billion valuation mark, driven mostly by huge AI funding rounds and strong investor excitement. From the outside, it looked like a major comeback. But not everyone was convinced. Some investors worried that valuations moved too quickly, especially for companies with little revenue or products still in early development.

By the end of the year, a clear split had formed. A small group of companies grew quickly and raised money at higher and higher prices. Others became unicorns mainly because of hype and big expectations around AI. The takeaway from 2025 was clear: unicorns were back, but investors were far more careful about which ones truly deserved the title.

Another important detail from 2025 was how long these unicorns stayed private. Even as fewer companies went public, the total value of private unicorns kept climbing, pushing the combined market value past $3.7 trillion. The number of active unicorns continued to rise, while new unicorn creation slowed compared to the peak years, showing that valuations were stacking up inside private markets rather than being reset through IPOs.

This helped explain why prices stayed high despite growing investor skepticism: capital kept flowing into later-stage private rounds, allowing unicorns to grow larger and more expensive without facing public-market pressure.

2025 Brought a Reality Check for IPOs

Looking back on 2025, the long-awaited return of tech IPOs delivered mixed results. Several high-profile, VC-backed companies finally went public, raising hopes for fresh liquidity after years of drought. But many of the biggest names struggled to hold their share prices after debuting, even as the broader stock market finished the year strong. The pattern felt familiar: early excitement around listings faded as investors grew more cautious and focused on fundamentals and macro uncertainty.

At the same time, 2025 showed that the public markets were not closed for everyone. A smaller group of companies performed well post-IPO, proving that strong stories could still break through. Even so, uneven results made investors and founders more cautious, with many choosing to wait rather than risk a weak debut.

As the year ended, optimism turned toward 2026, with hopes that calmer markets and a few major listings could finally unlock the liquidity VCs have been waiting for.

The First Signals of 2026: What They Tell Us About the Year Ahead

The opening weeks of 2026 delivered a few that might set the tone for how venture capital is likely to behave this year, and what kind of leadership LPs are backing.

Capital continues to flow at the top

The strongest signal came from Andreessen Horowitz, which raised $15 billion across multiple new funds, marking the largest fundraising effort in the firm’s history. This raise happened in a market where many managers struggled to close funds at all.

The message from LPs was unmistakable: scale is still rewarded when paired with access, platform depth, and long-term relevance. Capital flowed to firms seen as builders of enduring technology ecosystems, not just financial intermediaries.

Frontier technology and defense are now core VC categories

Almost simultaneously, Lux Capital announced the close of a $1.5 billion fund, its largest to date, focused on breakthrough science, defense, and advanced industrial technology. The fund was oversubscribed, with roughly $1 billion in additional LP demand turned away.

Lux’s portfolio includes companies such as Anduril Industries, Saildrone, and Astranis, businesses operating at the intersection of software, hardware, and government demand. These companies stand to benefit from increasing U.S. defense spending, procurement reform, and closer coordination between Silicon Valley and Washington.

More eyes on execution in deeptech

Deeptech enters 2026 under a different set of expectations. The market has moved past rewarding ambition alone. Capital allocation is going toward teams that show how scientific advances can be operationalized. Investors are placing greater emphasis on execution, timelines, and real-world adoption than on theoretical feasibility alone.

In Europe, especially, leadership now means closing the gap between research excellence and commercial outcomes. The focus is on companies that can survive the transition from prototype to production and build long-term industrial relevance. Fields like robotics, energy systems, quantum, advanced materials, and AI safety remain strategic, but only when investors can see execution and results delivered.

Higher standards and more selective capital for AI

In a very similar way, AI investment coming from European investors in 2026 is expected to favor focused applications over scale alone. Companies operating in regulated, enterprise, and mission-critical environments are attracting more attention, particularly where reliability, security, and compliance are central requirements.

Capital is increasingly directed toward AI systems that integrate into existing infrastructure and deliver productivity gains or risk reduction. Overall, investor expectations have shifted toward demonstrating how AI fits sustainably into business operations and public systems, rather than showcasing technical capability in isolation.

VCs moving away from climate

In 2025, climate tech became a much harder place for venture capital. Political changes, weaker government support, and the rapid rise of AI pulled money and attention away from green startups. Fundraising for climate and impact funds dropped sharply, and many companies struggled to raise new rounds or grow.

Some investors stepped back completely, while others changed how they talked about their funds, shifting away from climate labels and toward themes like resilience and adaptation.

📄 Interview Spotlight | ESG Fatigue as a Turning Point

This transition away from climate labels and toward more practical thinking also came up in a recent Zero One Hundred Conferences interview with Andera Partners. In the conversation, Andera’s Chief Sustainability Officer, Noëlla de Bermingham, pushed back on the idea that ESG is disappearing. Instead, she explained that ESG fatigue may be a sign of progress, with sustainability becoming part of core business decisions rather than a separate box to check.

The discussion closely reflects what we saw across the market in 2025. Investors are less focused on reporting frameworks and more focused on real risks and costs, like supply chains, energy use, and physical climate impacts. The message was clear: sustainability works best when it’s treated as a smart business strategy, not a label or marketing tool, matching the broader move toward realism and fundamentals in venture and private equity.

Watch the interview