What it takes to build a globally competitive deeptech business in Europe

Europe has long produced pioneering scientific research, but bridging the gap between early breakthroughs and building a globally competitive business is a challenge many founders face. Europe’s deeptech ecosystem continues to grow, with more and more venture capital flowing into it. According to Sifted data , deeptech startups in the region have raised €43.8bn so far in 2026 — a 143% increase on the €18bn raised across all of last year. The continent doesn’t always keep hold of its best companies though; if it wants to prevent its most promising deeptech companies moving overseas, it must build and nurture localised markets and public procurement demand. Two quantum computing operators who understand this reality better than many are Juha Vartiainen, cofounder of Finnish quantum company IQM , and Loïc Henriet, chief technology officer at French quantum company Pasqal . In an interview with Sifted, Vartiainen and Henriet unpack the challenges and opportunities of building homegrown companies and how individual company successes contribute to a much wider European deeptech ecosystem. Translating academic research into commercial products The transition from doing research in a university to scaling a deeptech company often requires a mindset change. Founders need to forget academic benchmarks and start thinking commercially to build and sell a product. “You have to redefine what success looks like,” says Henriet. While academia prioritises “performances, experiments and innovation,” clients and customers require dependability. If they’ll be able to sell in Europe, then they will start growing here. Academic research is usually an individualised environment, which often conflicts with the collaborative nature of building a company, adds Vartiainen. “We have to work towards [a] single outcome and that is our product. Academic researchers don't always work as a team. In a company you’re working for money. It's for the benefit of the company,” he says. Vartiainen advises academics looking to build a company to consider if they’re truly entrepreneurial. If those instincts don't come naturally, founders should prioritise bringing a commercial team onboard as early as possible. For those who are fundamentally scientists at heart, forcing the transition to a commercial startup path will be a “very rocky road,” he says. Advertisement Combining public support with private capital Public funding in Europe should act as a way to de-risk technology and bridge the gap between early-stage development and later-stage growth, says Henriet. Building quantum technology requires large amounts of patient capital before a product even hits the market. “There's a need for a lot of investment right away, before the company is profitable,” he adds. We have to work towards [a] single outcome and that is our product. Pasqal builds quantum computers using individual atoms, an approach known as neutral-atom quantum computing. The company generates revenue by selling physical machines to research centres and enterprises, and renting out computing time via the cloud. Its clients and customers include corporations in financial services, energy and materials science. The company's recent earnings report shows the reality of scaling quantum tech: revenue is growing, but R&D costs remain high. In the third quarter of 2026, Pasqal reported €3.3m in total revenue and the revenue from its core quantum cloud and consulting services surged by 53%. Following its public debut on the Nasdaq in August, the company has an order backlog of €69.8m as of September 2026. Rather than just a one-off injection of cash, early-stage deeptech relies on long-term backing. Public funding institutions like the European Innovation Council (EIC) play a huge role, with Henriet noting that public support is “needed continuously over many years to help industrialise, invest in R&D and to build the research and technical ecosystem.” Public funding also sends a signal of validation to the broader ecosystem and investors. While public funding helps to fund core technology, private capital is essential for entering global markets, and deeptech startups often need a lot of it to scale revenue. On average it takes $105m of VC capital and 11 years for deeptechs to reach more than $25m in revenue, according to a 2026 deeptech report by data platform Dealroom, versus $43m for non-deeptech startups. To reach more than $100m in revenue, deeptechs need $392m on average, against $113m for non-deeptechs. However, Vartiainen emphasises that various types of public funding benefit companies differently. During the Covid pandemic, IQM benefited from a ‘co-innovation project’ that acted as a "sweet spot — something between a research project and direct public procurement,” he says. The project was a public-private partnership between IQM and Finland’s state-owned research and technology organisation, VTT Technical Research Centre of Finland, to build Finland's first quantum computer. At the end of 2020, the Finnish government — through its innovation funding agency Business Finland — allocated a €20.7m funding package for the project. This funding was critical, says Vartiainen, because it pushed IQM to pursue a commercial outcome. IQM builds full-stack superconducting quantum computers and generates revenue by selling machines to supercomputing centres and research labs, as well as offering access to its systems via the cloud. In the third quarter of 2026, IQM reported €8.9m in revenue, showing a 51% year-on-year increase. Following its debut on the Nasdaq in July 2026, IQM is currently valued at roughly $1.6bn and has an order backlog of €102.5m. “We didn't get money because we generated costs, but because we achieved results and we were able to deliver to the customer,” Vartiainen adds. Utilising public procurement For Europe to ensure its most successful deeptech companies don’t move operations to the US or Asia to scale, it must nurture localised market demand. Henriet and Vartiainen both emphasise that a company will ultimately scale its operations where its loyal customers are based. Europe currently holds an advantage in quantum infrastructure, driven by government buying which offers an untapped pool of capital as well as a significant customer base. We didn't get money because we generated costs, but because we achieved results. Public procurement across the European Union accounts for around 14% of the EU’s overall GDP, according to analytics platform Hermix, representing approximately €2tn in annual spending by public authorities. Henriet explains that having “quantum computers that are installed in HPC [High-Performance Computing] centres in Europe” provides a crucial “infrastructure backbone”, and “public procurements played a key role in that.” According to data by quantum news and intelligence platform Quantum Insider, the European governments lead in quantum public procurement funding, with a confirmed $40.9bn of funding set aside. Of this amount, $13.6bn has already been spent, and $27.3bn is active or committed. The European Union Horizon Europe programme — the EU's funding programme for research and innovation running from 2021 to 2027 — has been a major driver. The European Innovation Council Fund is the largest deeptech public investor in Europe, leveraging €3.5 from private investors for every euro of public money spent, according to its EIC Impact Report. Fostering a loyal customer base also helps to “steer deeptech companies to the right direction commercially in Europe,” Henriet adds. Vartiainen has also seen this reality firsthand. “European enterprises are not that active, compared to what we’ve seen in the US and overseas. If you don't get European enterprises to adopt this technology, then they fall behind.” Despite market challenges, Europe’s scientific roots often make it easier to keep intellectual property on the continent. Henriet e