Europe's next wave of growth-stage unicorns will come from deep tech
Key points
Key takeaways from the Scaling Europe YouTube interview with Laura Connell, Managing Partner at Atomico (October 2026):
Europe's pipeline catches up with the US. For the first time last year, the number of new technology companies created in Europe — the top of the startup funnel — equalled the US, a Cambrian explosion that will feed far more venture-scale companies through the growth stage and into European GDP.
Deep tech reaches the growth stage. Next-generation compute now accounts for roughly 38% of European funding rounds above $100M in total funding, followed by physical and industrial AI including robotics, then defence, healthcare and biotech — reflecting the supply-chain buildout and re-industrialisation of Europe rather than the consumer businesses that dominated earlier cycles.
Bigger markets, faster time to value. The industries this generation of founders attacks are far larger and less procyclical than consumer markets, and the historical ten-year deep-tech horizon is compressing: combining classical machine learning with generative AI in areas such as engineering simulation can bring products to market far sooner, letting generalist venture funds back frontier technology and potentially producing much larger outcomes.
Growth investing stays tech-first. Platform VCs such as Atomico still evaluate growth companies from a technology-first standpoint, with value increasingly coming from IP and R&D rather than financial engineering; larger cheques add diligence, but the deeper shift is the blurring of venture and buyout as companies adopt buy-and-build rollups and raise joint-venture vehicles alongside a tech-first parent, in the style of frontier-AI deals with major cloud providers.
Why Atomico backed The Exploration Company. Laura Connell's latest investment: no buyer in any market wants single-source dependency on launch capacity, so a handful of heavy-launcher players is likely to be built over the coming decade, and The Exploration Company's team stood out for technical capacity, ambition and execution.
Over $2B in contracts. The company already holds more than $2 billion in contracts, notably for its next transportation capsule used to carry cargo, and its vertical integration positions it to meet rising demand to get payloads into orbit.
Global capital joins European rounds. US, APAC and Middle Eastern investors are increasingly active in European late-stage deals — driven by the financial opportunity and by geopolitical urgency around sovereignty and resilient supply chains — and founders now deliberately build global syndicates with a European, US, APAC and Middle Eastern mix, exactly as The Exploration Company's round showed.
A €860B growth-fund gap. Europe needs to scale its growth funds materially: Atomico estimates a €860 billion gap over the next decade to scale European growth-stage companies, and until European funds can lead the biggest rounds, European investors take a smaller share of the pie with knock-on effects on governance, IP localisation and talent.
AI's next phase is infrastructure. In an article co-authored with the founder of Corti roughly a year ago, Connell argued that application-layer barriers to entry are nearly zero and that the real bottlenecks to generative AI adoption are cost and latency, alongside regulatory and sovereign deployment requirements in sectors such as healthcare, making infrastructure the critical investment layer.
Read more: Scaling Europe (YouTube)
