€40m VC fund to support Europe’s deep-tech scene

15 Oct 2021

Founding partners of Lunar Ventures. Image: Lunar Ventures

Lunar Ventures’ founding partners aim to use their technical knowledge to emulate the deep-tech ecosystems in Tel Aviv and Silicon Valley.

Berlin-based VC Lunar Ventures has launched a new €40m early-stage deep-tech fund to invest in European start-ups.

European venture capital investments in the deep-tech sector have almost tripled in the last five years, accounting for roughly a quarter of the total VC backing in the continent, according to a recent Dealroom report.

In 2020, investment reached almost €10bn. However, much of that capital is invested at later stages when start-ups have matured.

Lunar Ventures, which was founded in 2019, is aiming to support start-ups in the early stages of their development, with seed and pre-seed funding.

It has already invested in 12 start-ups around Europe, including Deepset, Molecule, Zama and Mobius Labs.

The firm’s Israeli founding partners want to emulate the technical VCs based in places like Silicon Valley and Tel Aviv, but for the European market.

Many of the team’s members come from a technical background, with expertise across computer science, software architecture, product and early-stage investments.

“Technical start-up founders in Europe have a big problem,” said Lunar Ventures founding partner Dr Elad Verbin.

“They struggle to find investors who actually understand what they’re building. Most VCs in Europe don’t come from a technical or scientific background, and they struggle to evaluate the underlying technology, failing to invest in promising science-based moonshots.”

Verbin, who is a computer scientist as well as a venture capitalist, said that he and his team are aiming to “solve this problem”.

“After investing, Lunar’s technical team provides specialised support, and helps these technical founders communicate their unique value to potential clients, hires and other investors. Our mission is to revolutionise the European deep-tech scene, to ensure that every founder building a moonshot product can obtain funding as easily as in Tel Aviv or in the Valley, and to inspire more scientists and engineers to join the VC ecosystem.”

With its new fund, Lunar Ventures is looking to invest up to €1m in early-stage start-ups. It is mostly interested in software-focused areas, covering frontier computer science, machine learning, cryptography, new cloud infrastructures and next-generation databases.

Lunar has been backed by European investors including Isomer Capital, Multiple Capital, Aldea Ventures, Compagnia di San Paolo and the European Investment Fund.

Joe Schorge, managing partner at Isomer Capital, said there is a “clear gap in the market” for a VC fund with strong technical and product knowledge that can support the next deep-tech unicorns coming from Europe.

“We found the opportunity so exciting that we decided to incubate Lunar very early on, to push forward their vision of helping European deep-tech companies succeed on a global scale.”

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Blathnaid O’Dea is Careers reporter at Silicon Republic