Europe is often seen as a place where fundamental research drives innovation across countries and industries — an approach that takes a long time to result in category leaders, breakthrough products, and exorbitant deal amounts. At least that's what we often tell ourselves when looking at global funding statistics comparisons.
Be it as it may, deeptech is undoubtedly a growing industry this side of the Atlantic. According to the data presented by Atomico, deeptech companies raised almost $20 billion in first nine months of 2021. Our own number would be somewhat lower at about €12 billion — which is probably due to a difference in how deeptech is defined. (In fact, there seems to be no agreement even on whether it's two words or one.)
In this overview, deeptech companies are defined as those using extensive (scientific) research to bring innovative products on the market. This doesn't mean these companies have to be the first to come up with their product — but the niche should be narrow enough, and consist of mostly other deeptech players.
One notable category we're not looking at in this piece are pure biotech companies, which are in a league of their own in many ways, including funding amounts.
Now, without further delays, let's dive into the wonderful world of science, research, and fascinating things in Europe that have attracted the most investor money in 2021.
10. $125 million for digital therapeutics
Swiss digital neurotherapeutics platform MindMaze raised $125 million in October from AlbaCore Capital Group, in which the startup was valued at over $1.5 billion. In addition to its products, the company is also known by the fact that the list of its backers include the Hollywood star Leonardo DiCaprio.
MindMaze uses its neurology expertise to design games that use virtual and augmented reality to help patients restore motor function after stroke or brain trauma. In the games, which people can play at home or in a hospital, include tasks that involve moving arms, legs, or trunk in a certain way. The movement, monitored by a camera, is amplified in the game — and triggers a reward.
9. $165 million for a DNA printer
French biotech startup DNA Script secured $165 million in funding in October, a few months after launching its benchtop DNA printer for use in CRISPR gene-editing applications. The Series C round was led by Coatue and Catalio Capital Management, and brought the total amount raised by DNA Script to $280 million.
The printer in question, called the SYNTAX platform, is a device that "sets up in 15 minutes and within a few hours produces up to 96 oligos immediately ready for use in genomics and molecular biology research." The company's technology holds a promise to transform research processes across multiple industries where synthetic biology is involved by offering to print longer DNA sequences than before, and deliver them within a matter of hours.
8. $180 million for an AI-supported research platform
French-founded AI startup Owkin officially became a unicorn in November, when it inked a deal with the biopharmaceutical giant Sanofi. In addition to $180 million in equity funding, Owkin will receive $90 million as part of a "discovery and development partnership" over the next three years. The deal also provisions additional payments that depend on hitting certain milestones in the research process.
Although not a fundamental research company itself, Owkin fits the deeptech mould, as it applies AI to medical and biotech research across the world. Its platform connects data scientists, clinicians, academic researchers and pharmaceutical companies to create global datasets, while also protecting patient data within a hospital’s local infrastructure. Its offering consists of four parts: Owkin Loop (the network), Owkin Connect (the technology infrastructure), Owkin Studio (the AI software tool), and Owkin Lab (the expertise).
7. $205 million for electric air taxis
Bristol-based company Vertical Aerospace landed $205 million in November to support its work on an electric vertical take-off and landing (eVTOL) aircraft. The money, which came from the US-based firm Mudrick Capital and Paris-headquartered Kouros, is to be used for certification and production of Vertical Aerospace's first vehicle.
The VX4 aircraft, which fits four passengers and one pilot, is expected to be certified around 2024. According to the specification, it can fly at up to 321km/h and has a range of over 160km. The manufacturer also claims that VX4 will be "near-silent" in flight. Vertical Aerospace already has 1,350 pre-orders for VX4, while airports in London, Tokyo and Sao Paolo are interested in testing the aircraft as a flying taxi.
6. £195 million to fight COVID-19
UK-based DNA sequencing biotech company Oxford Nanopore secured £195 million in May in a surprise funding round ahead of the IPO that took place in September. The public listing, in which the company raised £524 million, valued the Oxford-based company at almost £5 billion.
The company, which has developed next-generation devices for DNA and RNA sequencing, has been actively working on fighting COVID-19. It had focused on tracking of coronavirus mutations through a proprietary genome sequencing technology, and providing rapid tests for the NHS.
5. $220 million for agile robots
German hardware and software startup Agile Robots raised $220 million in September in a round led by SoftBank Vision Fund 2. The funding deal valued Agile Robots at over $1 billion. The company, which has headquarters in Munich and Beijing, humbly calls its products "the future of robotics", as its five-fingered robots can be deployed in a wide range of settings, from appliance assembly lines to healthcare organisations.
Agile Robots emphasizes four pillars of its robotic technology: force perception, which means that its robots can literally feel the physical world; advanced vision technology based on deep learning; autonomous planning that allows robots to develop and adjust moving trajectories in real time; and intelligence algorithms, with which the robots can quickly adjust to new environments.
4. €200 million for more eVTOL vehicles
Germany-founded urban air mobility (UAM) startup Volocopter secured €200 million in funding in March to support certification and production of its eVTOL air taxi vehicle, VoloCity. Unlike the aircraft developed by Vertical Aerospace, which resembles a conventional plane, the German one looks more like a quadcopter on steroids, with a helicopter cabin attached underneath a frame with 18 rotors.
VoloCity can carry one passenger and one pilot up to 35km at up to 100km/h. In the future, Volocopter envisions the vehicles operating autonomously with two passengers onboard. The aircraft features detachable batteries that can be swapped in under five minutes, which should significantly decrease turnaround times and allow for almost continuous service.
Rome's Fiumicino airport is likely to become the first place where VoloCity will become operational. The plan is to connect the airport to several locations in the capital of Italy already within "two-three years".
3. $300 million for satellite internet access
London-based satellite communications company OneWeb attracted a $300 million investment from South Korean defence electronics and information infrastructure firm Hanwha Systems at a valuation of over $3 billion.
OneWeb had a roller coaster of a year in 2020, when it was saved from bankruptcy by the UK government and Bharti Global, which together invested $1 billion in the company. These days, however, it seems quite alive with 394 of the planned 648 satellites already orbiting our planet.
When the whole satellite constellation is launched — which is expected to happen next year — OneWeb should be able to offer high-speed low-latency internet access to customers globally. The list of prospective clients includes "telecommunications providers, aviation and maritime markets, ISPs, and governments worldwide".
2. $600 million for surgical robots
UK-headquartered robotics company CMR Surgical landed $600 million in a Series D funding round in June. The round, which valued the company at $3 billion, was co-led by SoftBank Vision Fund 2 and Ally Bridge Group.
CMR Surgical's main product is a robotic keyhole surgery system called Versius. It's optimised to make the operation minimally invasive, and focuses on conditions like bowel disease or bowel cancer. At the time of the announcement, CMR mentioned that Versius had already been involved in 1,000 surgeries. It has been used in four NHS hospitals in the UK, as well as in Italy, India, UAE, and Australia, among others.
1. $2.75 billion for sustainable batteries
The largest deeptech funding round of the year — which also happens to be the largest one, period — was raised in June by the Swedish battery developer Northvolt. The company, the mission of which if to produce sustainable lithium batteries, will use the money to increase its annual production capacity in Europe to 150 GWh by 2030. The funding was co-led by existing investors Goldman Sachs and Volkswagen, together with the new ones, Swedish pension funds AP1-4 and Canada's OMERS.
Volkswagen contributed €500 million to this round to keep its 20 percent stake in the battery maker. The German automotive giant also placed a $14 billion battery order with Northvolt in March; another player from the region, BMW ordered $2.3 billion worth of batteries last year. In addition to those, Northvolt is working with the Swedish truck manufacturer Scania and energy storage company Fluence (a joint venture of Siemens and AES).
Earlier this week, Northvolt announced that its Swedish production facility had delivered the first lithium-ion battery cell. The company says that it's the first cell of its kind to be fully designed, developed, and assembled at a gigafactory by a European company. It also mentioned that commercial deliveries will start in 2022.
These are some of the most significant deeptech deals we've seen over the year. The European industry of innovative and R&D-heavy companies and products has again proven to be diverse, as well as quite resilient in the face of the pandemic. Stay tuned for more focused coverage in the new year; in the meantime, check out our end-of-year reflection series over here.