Berlin-based VC Lunar Ventures has launched a new €40m early-stage deep tech fund to invest in European start-ups.
European VC investments in the deep tech sector have almost tripled in the last five years, accounting for roughly a quarter of the total VC investments in the continent. In 2020, they reached almost €10bn. However, most of the capital that is invested is either deployed at an early stage or at later stages when companies have matured.
Lunar Ventures, which was founded in 2019, is aiming to support start-ups in the middle stages of their development. It is interested in supporting pre-seed and seed stage businesses.
The VC’s Israeli founding partners want to emulate the technical VCs based in places like Silicon Valley and Tel Aviv, but for the European market.
Many of the investment team’s members have technical expertise of their own which they believe is important to fully support deep tech start-ups.
Lunar Ventures has already invested in 12 start-ups around Europe, including Deepset, Molecule, Zama and Mobius Labs. Its team has expertise across several sectors including computer science, software architecture, product and early-stage investments.
According to Lunar Ventures founding partner, Dr Elad Verbin, “Technical start-up founders in Europe have a big problem. They struggle to find investors who actually understand what they’re building. Most VCs in Europe don’t come from a technical or scientific background, and they struggle to evaluate the underlying technology, failing to invest in promising science-based moonshots.”
Verbin, who is a computer scientist as well as a venture capitalist, added that he and his team aimed to “solve this problem.”
“After investing, Lunar’s technical team provides specialised support, and helps these technical founders communicate their unique value to potential clients, hires and other investors. Our mission is to revolutionise the European deep tech scene, to ensure that every founder building a moonshot product can obtain funding as easily as in Tel Aviv or in the Valley, and to inspire more scientists and engineers to join the VC ecosystem,” he said.
With its new fund, Lunar Ventures is looking to invest up to €1m in early-stage deep tech start-ups. It is mostly interested in software-focused themes, such as frontier computer science, democratising machine learning, cryptography, new cloud infrastructures and next generation databases.
Lunar is backed by many of Europe’s institutional fund investors, including Isomer Capital, Multiple Capital, Aldea Ventures, Compagnia di San Paolo and the European Investment Fund.
Joe Schorge, managing partner at Isomer Capital, commented on its investment in Lunar Ventures’ fund, “There is a clear gap in the market for a VC fund with strong technical and product knowledge that can identify and support the next deep tech unicorns coming from Europe. We found the opportunity so exciting that we decided to incubate Lunar very early on, to push forward their vision of helping European deep tech companies succeed on a global scale.”
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