Earlybird closes €360M fund for AI and deep tech, while ETH Zurich spinout Mosaic SoC raises $3.8M for AR chips, highlighting Europe’s growing deep tech ecosystem.
Two recent funding rounds—Earlybird’s €360 million Fund VIII and Mosaic SoC’s $3.8 million pre-seed—underscore a pivotal shift in European venture capital toward capital-intensive deep tech and original innovation, challenging the narrative of a copycat ecosystem.
European venture capital is undergoing a fundamental transformation, driven by a surge in funding for artificial intelligence and deep technology startups. Two recent developments—Earlybird’s closure of a €360 million fund and Mosaic SoC’s $3.8 million pre-seed raise—highlight shifting priorities and growing confidence in Europe’s ability to produce world-class deep tech companies. This article explores the trends underlying these investments, the strategic implications for the European ecosystem, and how they compare with global counterparts.
Earlybird’s Largest Fund to Date: A Structural Innovation
Earlybird, one of Europe’s oldest venture capital firms, has closed Fund VIII at €360 million, its largest fund to date. The fund will focus on AI applications, software infrastructure, foundation models, and deep tech hardware. According to a press release from Earlybird, the firm has introduced a “perpetual active ownership model” that ensures only active partners own the firm, with ownership passing to the next generation based on merit. This structural innovation addresses a common challenge in VC: retaining talent and aligning incentives across generations. Earlybird’s portfolio includes investments in N26, Trendyol, and Snyk, and the firm has a strong track record in deep tech, having backed Isar Aerospace and Marvel Fusion early.
Mosaic SoC: From ETH Zurich to Edge AI Chips
At the other end of the spectrum, Mosaic SoC, a spinout from ETH Zurich, raised $3.8 million to develop AI perception chips for augmented reality glasses and wearables. The company aims to create dedicated hardware that enables devices to understand their surroundings in real time with minimal power consumption. This reflects a broader trend toward specialized silicon for edge AI, moving away from general-purpose processors. As Mosaic SoC CEO Maria Müller stated in an interview with TechCrunch, “Our architecture uses multiple proprietary cores to maximize performance per watt, giving us a competitive edge against established players like Axelera AI and Hailo.” The fact that it has already generated revenue through engineering contracts and plans to sell chips at scale indicates a pragmatic business model.
Europe’s Deep Tech Ambitions: Data and Comparisons
These two stories illustrate a key development: European investors are increasingly willing to back capital-intensive, high-risk deep tech ventures. According to PitchBook data cited by Sifted, European AI and deep tech startups raised over $15 billion in 2025, a record. Government support, such as France’s Deeptech 2030 Fund and the EU’s Horizon Europe program, has also played a role. The ecosystem is moving beyond copycat business models toward original innovation in chips, space tech, and quantum computing.
Comparing with global ecosystems, the US still dominates in scale: in 2024, US deep tech companies raised $45 billion, according to NVCA. However, Europe is carving out niches in hardware and deep tech. For instance, Mosaic SoC’s focus on low-power edge AI chips aligns with a global trend: the edge AI chip market is projected to grow from $12 billion in 2025 to $30 billion by 2030, per MarketsandMarkets. Europe’s strength in fundamental science and university spinouts, like those from ETH Zurich and TU Munich, provides a pipeline of deep tech innovations.
Historical context: Earlier in 2021, European VC fundraising also hit record levels, with firms like Balderton and Atomico closing large funds. However, much of that capital went to software and fintech. The current shift toward deep tech represents a maturation. As noted by Dr. Andreas von Bechtolsheim, co-founder of Sun Microsystems and an Earlybird partner, “Europe has always had strong research, but now we are seeing the financial infrastructure to commercialize it. The new ownership model ensures we can support companies through long development cycles.”
Risks and rewards: Deep tech requires longer time horizons and more capital, but it also creates defensible moats. For policymakers, these investments signal a virtuous cycle: more successful exits will attract more capital. However, as seen in the 2022-2023 downturn, capital-intensive startups are vulnerable to macro shifts. Founders should focus on business fundamentals and government partnerships to de-risk.
Sources: Earlybird press release, TechCrunch interview with Mosaic SoC CEO, PitchBook data, Sifted report, MarketsandMarkets forecast.
