Setting up an environmental deeptech in Europe means navigating between recognized scientific excellence and a financing ecosystem that is structurally unsuitable for its cycles.
In 2021, the jury of the EIC Accelerator — Horizon Europe’s flagship program for deeptech — positively assessed the application. Seal of excellence, they say. This label recognizes the quality of the project but also means, concretely: no financing. The envelope is exhausted. Your technology is excellent. Good luck. I spent a lot of time explaining to investors what “Seal of Excellence EIC” meant. And I understood that the problem was not in my file — it was in the structure of European deeptech financing.
The Valley of Death is real — and specific to deeptech
Deeptech is not a startup classic. It does not follow the growth curve of a SaaS application. Between proof of concept in the laboratory and the first commercial deployment on an industrial scale, it takes between 5 and 10 years, significant investments in R&D and pilots, and an ability to go through years without significant revenue.
This reality is misunderstood by the majority of generalist venture capital funds. Their models are calibrated for horizons of 5 years with exits at 7 years — incompatible with deeptech cycles. Their investment teams rarely have engineers capable of assessing the real maturity level of a technology (the famous TRL — Technology Readiness Level) and have difficulty distinguishing “almost ready” from “promising but far away”.
The result: European deeptech companies that are underfunded at critical moments, which end up selling their technology to American or Asian players who have the means to scale it. Or who die in the valley, due to lack of financial bridge between scientific validation and the first customer.
What industrial pilots teach — and what financial models miss
I had the chance to lead pilot projects with Veolia Water, Eau de Paris, PVS Austria and Marubeni. These experiences have taught me things that no financial model can capture.
First, that validation on real water is fundamentally different from validation in the laboratory. Natural water matrices are complex, variable, unpredictable. A polymer that performs 95% on a synthetic solution can perform 80% on real water loaded with organic matter — and it’s this second number that counts. Investors who have never set foot in a pilot station do not know that this gap exists.
Then, that the sale to a large operator takes two to three times longer than expected. The decision-making cycles of Veolia or a public water utility are incompressible — technical committees, regulatory approvals, parallel testing of competing technologies. This is not inertia: it is caution on critical infrastructures. An investor who models a first contract at 18 months finds himself at 36 months — and panics.
Finally, that the first customer is a strategic asset as much as a commercial asset. Eau de Paris or Veolia as a reference, it is a technical guarantee which opens the doors to other global operators. Investors who view the cost of the first pilot as a customer acquisition cost are missing what it really is: an investment in credibility.
What good deeptech investors do differently
There are funds that understand deeptech. They have teams with real engineers. They have investment horizons of 10 to 12 years. They accept technological progression milestones (TRL, pilot results, patents granted) instead of requiring 6-month turnover curves. And they understand that the value of an environmental deeptech is based on three assets that cannot be read directly in an income statement: the patent, the team, and the relationship with the first industrial customers.
These funds exist — in France, Bpifrance partially plays this role. In Europe, the EIC Fund is moving in the right direction. But they are too few in number and not sufficiently resourced compared to what the United States deploys in its climate deeptech financing programs.
The good news: we are still in the phase where environmental deeptech is undervalued. The bad news: this window won’t last. Those who enter now will have the best positions — provided they accept the rules of the deeptech game, not deny them.
“Deeptech doesn’t ask investors to take more risks. It asks them to understand different risks — technological, long, but structurally sound. The valley of death is not a metaphor. It’s a real place that we’ve been through. And on the other side, there’s a market.”
