
Bottom line: European innovation in deep-tech climate is still highly underrated.
What follows is just a quick summary of what I saw last week in the UK and EU:
- Incredible entrepreneurial energy
- Eager and supportive universities and research orgs
- Investors ready to take the baton
- Strong government support
This is what we learned in just a week visiting our Breakthrough Energy Fellows and speaking with great partners like ARIA, the Universities of Cambridge, Nottingham, Lincoln, Luxembourg, Imperial College London, the Technical University of Munich, Future Planet Capital, Zero Carbon Capital, Planet First Partners, the European Investment Bank Institute, the Luxembourg Institute of Science and Technology, Luxinnovation, and many more.
No matter how you currently rate European climate tech, you should revise your estimates higher!
Don’t think I’m saying that Europe has suddenly sprung onto the scene. Europe has long been recognized for its Green credentials — smaller cars, more walkable cities, public transit, “flygskam”, Greta Thunberg. And there have been notable government policies for decades — Germany’s solar subsidies and a framework of carbon costs/taxes. In the private sector, the region has been a leader in areas like wind power and you’ve probably also heard about the recent wave of high-profile, highly-funded startups in the space — Northvolt, H2GreenSteel, Hybrit, and more.
What I am saying here is that something has dramatically shifted over the last 10 years — and I think no matter how you currently rate European climate tech, you should revise your estimates higher!
#1 Everywhere optimism about entrepreneurship.
The overall entrepreneurial mindset has clearly undergone a transformation in the last decade.
A few years ago, headlines describing the EU as playing catch-up with the US and Silicon Valley were common:

Compare that to what you read today, and it’s clear the race is on:

By these numbers, VC investment in Europe has grown from some $4 billion in 2011 to $100 billion in 2021!


These numbers aren’t deep-tech or climate-tech specific, but in every conversation we had, there was a clear sense that there is no shortage of entrepreneurs and great ideas. The notion that Europeans are not as risk tolerant as Americans certainly needs to be revised.
#2 Research universities are eager and active to get technology out the door
In the UK, universities we visited were eager to have companies “spin in”.
Under this “embedded company” model, even startups without a previous link to the university can rent space and, more importantly, get access to key scientific equipment— with no demands that the university would take IP or ownership.
In addition to continuing to lead on innovation and research directly, I was am incredibly excited by the new Institute for Deep Tech Entrepreneurship at Imperial College London.
“While Venture Capital (VC) remains a powerful source of risk capital to build traditional digital and technology ventures, the nature of deep tech ventures often makes them a poor match for VC investment: they have longer timelines before they can commercialise and generate revenue, the technology and market risks are significant, de-risking these technologies is capital-intensive, and the high standard of science is not easily matched with commercial experience of the same calibre. Together, these factors imply that many high potential ventures are either spun out too early or undercapitalized, leading them to fall into the “valley of death” between university research programmes and commercially viable investments.”
Institute for Deep Tech Entrepreneurship, Imperial College London
The description of their mission is music to my ears — this is exactly what we argued in our study of venture capital financing in our Cleantech VC study.

The new institute is led by Ramana Nanda, one of the sharpest minds thinking about building and funding science-based businesses. Not only will the institute provide hands-on support to innovators launching new companies, but under Professor Nanda’s leadership, they’ll be engaging in a deeper analysis of what makes these ventures successful and studying how to increase the odds of success.
#3 Investors Standing Ready
The overall VC numbers above speak for themselves – a 10-fold increase in funding over the last decade is incredible. Not only has overall VC activity increased, but according to this report from Dealroom/Talis, Climate-focused investment activity has also ticked up 10x over the last 5 years.
New fund formation also hit an all-time high — and note that this is a very narrow slice, showing only European-only climate-tech funds. The reality is even more exciting — many global funds are also investing in the region and many generalist funds are funding climate-tech startups.
When we met with just a few of these investors last week, it’s clear they are eager to put real capital to work.
#4 European governments are stepping up
In the UK, we met with the leaders of ARIA, the UK’s new Advanced Research and Invention Agency. Taking the best of the US Advanced Research Project Agencies (like DARPA, or the Department of Energy’s ARPA-E) and adapting it based on the lessons learned, I believe this will accelerate the UK’s position in innovation across not just climate tech but other deep-tech sectors like computing, health, space, and more.
ARIA is really brand new – the website launched last week and they’re looking for their first Program Directors. Check out this great short film put together by Works in Progress for more.
Meanwhile, in the EU, the European Commission just passed their response to the U.S.’s Inflation Reduction Act — the Industrial Green New Deal program. The team at Pale Blue Dot (another great European investor) has a great summary.
The plan has four communicated pillars (each including a number of initiatives), and we will look at each of them below:
Pale Blue Dot
– a predictable and simplified regulatory environment;
– faster access to sufficient funding;
– skills; and
– open trade for resilient supply chains.
While this legislation is fresh and there are plenty of details to work out, it has huge potential to spur incredible additional funding in the region.
Don’t Sleep on Europe
It’s not to say that there aren’t challenges. For example, we didn’t hear much love for Brexit — indeed we heard many times that it has raised new roadblocks to scientific collaboration and made it more difficult for UK teams to find the specific engineering talent they need. On the EU side, we did hear concerns that, despite all the progress on building an entrepreneurial ecosystem, there is still a temptation for teams to move to the US because they believe funding will be easier or because the regulatory structure of the Delaware Chancery Court provides a more certain (and more widely accepted) regulatory framework.
Those challenges notwithstanding, all of this together leaves me more optimistic than I’ve ever been about Europe’s continued role in this space. It is abundantly clear that funding and supporting innovation in climate tech and deep tech more broadly is a positive-sum game. Within the region and abroad, increased entrepreneurship invites more investment capital, both make the political economy of encouraging innovation-forward climate policies and funding research and development more appealing to governments, and ultimately pave the way for bringing to market the solutions we need to get to a Net-Zero global economy.