University spinouts across Europe have grown into a $398 billion startup pipeline, as venture capital increasingly flows toward deep tech and life sciences companies emerging from academic research, even while overall European VC investment remains well below its 2021 peak.
Academic Research Converts Into Scaled Companies
According to the European Spinout Report 2025 published by Dealroom, 76 European university spinouts have reached either a $1 billion valuation, $100 million in annual revenue, or both. These companies span deep tech and life sciences and include unicorns such as Iceye, IQM, Isar Aerospace, Synthesia, and Tekever.
Dealroom estimates that European spinouts are on track to raise $9.1 billion in 2025, close to an all-time high. This contrasts with overall European venture funding, which remains nearly 50% below its 2021 peak.
New Funds Target University-Born Startups
The report notes the emergence of new venture funds focused specifically on academic spinouts. Denmark-based PSV Hafnium recently closed its first fund at €60 million, about $71 million, exceeding its target. The fund focuses on Nordic deep tech and is itself a spinout from the Technical University of Denmark.
Another newcomer, U2V (University2Ventures), is targeting a similar €60 million fund. The firm operates from Berlin, London, and Aachen and has completed the first close of its inaugural vehicle.
These funds join a category that was initially shaped by university-linked investors such as Cambridge Innovation Capital and Oxford Science Enterprises, both of which are now fully established. The investor base has since widened to include independent venture firms that view spinouts primarily as high-return opportunities rather than institutionally anchored projects.
Billion-Dollar Exits Reinforce Investor Appetite
Dealroom highlighted that six spinouts from Switzerland, the UK, and Germany delivered exits above $1 billion in 2025. One of them was Oxford Ionics, which was acquired by US-based IonQ.
The report said these outcomes have reinforced investor interest at a time when large funding rounds remain scarce in Europe. In 2025, spinouts closed sizable rounds across sectors including nuclear energy, such as Proxima Fusion, and dual-use defence technology, including Quantum Systems, which is now valued at more than $3 billion.
Many of these companies are built on long-term research from specialised laboratories, contributing to a broad geographic spread of spinout activity beyond traditional hubs such as Cambridge, Oxford, and ETH Zurich.
Expanding Beyond Traditional Academic Hubs
Newer funds are increasingly looking beyond established centres to source deals. PSV Hafnium said Nordic research institutions hold significant untapped potential. Although the firm originated from DTU, it has made early-stage investments across the Nordic region.
One of PSV Hafnium’s nine investments to date is SisuSemi, a Finnish startup using research developed over a decade at the University of Turku to develop surface-cleaning technology for semiconductor manufacturing.
The report noted that funding is now complemented by grants, commercialisation support, and improved deal structures, creating a more supportive environment for academic founders.
Growth Capital Remains A Structural Gap
Despite increased early and mid-stage funding, Dealroom identified a persistent shortage of growth capital. Nearly half of late-stage funding for European deep tech and life sciences spinouts still comes from outside Europe, primarily from the United States.
While this share has declined over time, the report said Europe continues to export a significant portion of value created through publicly funded research. Dealroom added that the challenge is not limited to spinouts but reflects a broader structural issue across the European startup ecosystem.
Featured image credits: Pickpik
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