Challenges in Scaling Up European Deep Tech Companies

The scaling up of European deep-tech companies encompasses various challenges that require delicate considerations like first-hand investments and preliminary recommendations.

FREMONT, CA: The technological population of Europe was limited when compared to the tech-rich regions globally in previous times. However, the scenario has begun to evolve in recent years owing to emerging European universities and research centres that are gaining monumental significance. These promising innovations are favouring startups with increasingly productive European-level initiatives for productive results. Moreover, the soaring rate of the arena's startups is relatively surging, following the European deep-tech investment’s acceleration rate by 50 per cent annually. Various reports elucidate that the venture-capital equity raised by European deep-tech startups are differing by rising and declining over a steady period.

Groundbreaking technologies like synthetic biology, quantum computing, and advanced materials from laboratories to market are highly employed by European deep-tech startups in addressing large-scale fundamental problems in recent times. These differing challenges include scaling up with the demonstration of technology and market success. Similarly, businesses that step out of the startup phase encounter enumerating tests like finding the right funding, building management, and marketing capabilities that constitute a productive board of directors. Whereas, addressing these hurdles often may be intertwined where attracting talents depends on an increased number of factors like a strong management team, appealing employee value proposition, and a prior securing of funds for competitive employee compensation.

Emerging European companies are held in high regard to express their pride in the arena’s origins as their hope to bud as a success story accelerates with the nation’s promising investors. That is, they prefer a European-backed startup and thus compete with other nations that are racing ahead in the advanced technology pack. Hence, Europe, with its robust fundamental research capabilities and talents at its disposal, is becoming a potential tech player owing to an optimal level of commitment and support.

The European Innovation Council (EIC) set up by the European Commission aims to monitor emerging technologies with the potential in becoming strategically crucial and thus favour Europe in achieving technological sovereignty. Additionally, it also facilitates emphasising the technology-based segments with technologically advancing nations to improve the EU’s productivity. Therefore, as an initiative measure, the council gathered partners for the EIC ScalingUp project that encircles the challenges in scaling and thus designs a blueprint accordingly for its enhanced addressing.

Generally, companies that are striving to scale up encounter a series of setbacks, often referred to as European-specific challenges. For instance, securing potential financing and leading investors while leveraging a productive board of directors with independent members is relatively hard to achieve and thus requires considerable attention. Meanwhile, developing a compelling business strategy and investment narrative in addition to timely navigation of institutional challenges also reduces the scale. Furthermore, difficulties in collaborating with a large cooperative, the attraction of necessary businesses and technical talents, and cooperative partnering with other businesses and organisations located all over the ecosystem account for many more complications.

Therefore, first-hand investments from European deep-tech companies and investors hold suitable relevance for deep-tech companies, investors, and government policymakers. Similarly, preliminary recommendations on stakeholders' ability to support emerging deep-tech capabilities are also on a surge to ensure that the EU remains at the top of the competitive table in advancing technologies.