Not a day goes by with out some affirmation that ​​deep tech is on the rise in Europe — and private and non-private capital buyers are right here for it.

Newest working example, OTB Ventures, which closed a $185 million fund to spend money on deep tech in Europe that it’s going to principally deploy on the Collection A stage. Nevertheless, as much as 10% might be allotted to seed funding, and greater than 50% to follow-on investments.

OTB’s early-growth fund — its second and largest to this point — is as soon as once more backed by the European Funding Fund (EIF), with assist from the European Union below the InvestEU Fund. The enterprise agency welcomes this assist, in addition to EIF’s evolving funding thesis, OTB co-founder and managing accomplice Adam Niewiński informed For Millionaires.

“We see EIF focusing increasingly more on actual modern applied sciences — we will name it deep tech, we will name it actual tech, however we’re mainly speaking about actual disruptive applied sciences popping out of Europe, and having the ability to compete globally, or not solely compete globally however lead world tech innovation.”

One other deep tech supporter made its entry on OTB’s cap desk: NATO Innovation Fund (NIF), which is beginning to deploy the €1 billion it should spend money on funds and in startups from its backing members.

“Our first 1 billion flagship fund invests on the intersection of deep tech, protection, safety and resilience, with themes together with vitality, quantum computing, autonomy, local weather, industrials, house and biotechnology. OTB totally aligns with our mission,” NIF managing accomplice Andrea Traversone mentioned in a press release.

OTB’s tackle deep tech focuses on 4 verticals that do sound pretty NATO-compatible: house tech, enterprise automation and AI, cybersecurity and fintech infrastructure. That might be the place fintech goes a bit extra technically modern; this might be AI-enabled anti-money laundering like Fund 1’s portfolio firm Silent Eight, as an example.

Since OTB already began making investments out of this fund following its first close in November 2022, we have already got a way of the place it should go. For example, its 9 investments to this point embrace German startups KYP.ai, a productiveness platform, and Semron, which is growing modern chips.

On the charged query of dual-use know-how, fellow OTB co-founder and managing accomplice Marcin Hejka was eager to dispel misconceptions. From house and IoT AI to 3D printing, “it’s completely pure that the protection sector is making use of increasingly more applied sciences with civilian roots. It shouldn’t be confused with investing in weapons, it’s fully not that.”

We wished we had requested that very same query to NIF, however this should wait, because it declined to be interviewed for this text.

This implies we will’t verify both whether or not the funding that went to OTB may even have gone to, say, a French or Austrian deep tech fund. Like NIF, OTB is headquartered in Amsterdam, and its different workplace is in Warsaw, the place NIF can be planning to have a regional workplace. Maybe extra importantly, each the Netherlands and Poland are contributors to NIF.

Per NIF’s guidelines, it should solely “make direct investments into start-ups situated in any of the 23 collaborating Allied nations” — an inventory of backers that doesn’t totally overlap with NATO or EU members, and notably doesn’t include France. Nevertheless, NIF’s geographic scope is much less clear on the subject of the oblique investments, because it solely refers to “deep tech funds with a trans-Atlantic impression.”

Both means, OTB’s roots have advantages. The agency boasts “an unfair benefit in accessing Central and Japanese European dealflow,” and that is additionally enjoying off on its cap desk. Its new fund is backed by CEE entrepreneurs, and never solely ones it beforehand backed: Its LPs embrace Snowflake co-founder Marcin Zukowski, who was already far alongside in its journey when OTB was based in 2017.

OTB might have missed out on backing Snowflake, however it has different success tales below its belt with Fund 1, together with BabbleLabs’ acquisition by Cisco in 2020 and Minit’s sale to Microsoft in March 2022.

It’s going to seemingly take a couple of extra years for Fund II to result in M&As, however Niewiński has broader hopes. “Our new fund empowers us to additional our mission of supporting disruptive deep tech startups which can be leveraging Europe’s excellent tech expertise pool — the most important pure useful resource that our continent can provide.”