Aikaterini Liakopoulou, a business coach for EU-funded deep-tech start-ups, shares her views of the European ecosystem and her advice for founders.
In recent years, focus has turned from tech start-ups of any description to deep-tech start-ups. These are companies that are aiming to bring products to the market that are based on scientific, engineering or technological challenges.
The need and interest in deep-tech start-ups has been rising steadily both in Ireland and across Europe.
The European Innovation Council (EIC) was launched in March 2021 to support emerging tech in Europe and “make money out of science”. Through the EIC, more than €10bn will be invested in innovative research-based start-ups and SMEs up to 2027. As part of this initiative, the European Commission announced funding worth €1.6bn for the EIC to help scale up various breakthrough technologies in 2023.
According to a 2022 report from the European Patent Office, deep-tech businesses in the European Union lagged behind their counterparts in the US. Since then, there has been an undeniable boost to the deep-tech ecosystem.
In another report published in January of this year, deep tech became one of Europe’s strongest sectors in 2022, with start-ups raising $17.7bn for the year.
To gain further insight into the European deep-tech ecosystem, SiliconRepublic.com heard from Aikaterini Liakopoulou, a business coach for EU-funded deep-tech start-ups and a speaker at the 2023 Schools for Female Leadership in the Digital Age, run by Huawei’s European Leadership Academy.
Liakopoulou started out as an engineer, building applications for the energy and aviation industries before advancing into other areas such as venture capital, investment, founder coaching and angel investing.
Her work with deep-tech entrepreneurs started in Silicon Valley in 2015. When she subsequently returned to Europe, she stayed in the field and currently assists the European Commission in deploying its €10bn deep-tech fund. She also coaches EU-backed founders on their mission, vision, execution, fundraising and exit.
The European ecosystem
“Clean-tech, health-tech, quantum, semiconductors as well as new materials are at the centre of the European deep-tech start-up ecosystem,” she told SiliconRepublic.com.
“It’s unique from other places in the world both in its drivers and its founders’ characteristics. There is a federal policy push (and massive public funding) around areas to secure the continent’s tech sovereignty, creating a domino effect for private investors too. Thus, we see new types of term sheets emerging that combine public and private funds.”
Liakopoulou added that European deep-tech founders are also unique compared to those in other geographies in terms of their traits.
“They tend to be senior executives, sometimes spanning out from professorships or from a big corporate career and are not often what we call ‘seasoned entrepreneurs’. Differences in business culture and communication among the EU countries also come into play, thus further fragmenting the EU deep-tech ecosystem.”
Liakopoulou is right about the increased funding and policy push creating a domino effect. Investors have increased their interest in deep-tech start-ups significantly. For example, in February of this year, European venture capital firms Amadeus Capital Partners and Apex Ventures created a new €80m fund for early-stage start-ups in the deep-tech space.
But while investor interest has increased, deep-tech start-ups often face unique challenges due to the complexity and long development cycles of their products.
“Investing in hardware companies has been a turn off over the last [few] decades but this is changing as new needs emerge,” said Liakopoulou. “The investor landscape segments further and investors are currently looking for ways to differentiate by positioning themselves in more impact-driven opportunities so they can also attract Generation Z founders.”
She added that scaling the tech is another major challenge for deep-tech start-ups and said that founders in this space should look to partner with established corporates in their sector to get access to larger infrastructures and client bases.
Advice for deep-tech founders
While the challenges are unique, it’s clear that the deep-tech space is a lucrative area for start-ups, given the level of investor interest – if they know where to go.
“The investor landscape is getting segmented more and more. Pitching to the right investors, the ones that are actively looking for solutions in your space, will save you the time of trying to convince someone why it is interesting (aka profitable) to invest in a new quantum computer,” said Liakopoulou.
“Look out also for investors with deeper pockets as your cash needs will be doubling or tripling in the early rounds.”
She also said that her earlier advice of striking a joint venture or a sales contract with a well-established player in their sector will be a strong signal for investors.
“Look for opportunities to engage with industry experts and roundtables so your ecosystem knows what you care about or which pieces of the puzzle you are missing – these opportunities can serve as an excellent tool to attract both talent and investors to your company,” she said.
Another challenge that can uniquely hit deep-tech start-ups is ensuring their intellectual property is protected and this can be done by filing for patents. However, the expense of this can sometimes put companies off doing it straight away.
“However, if you [are] building hardware innovation, developing a solid patent strategy in the jurisdictions where your biggest markets are is key. Several early-stage deep-tech companies are even hiring a patent board to guide them in the topic.”
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