Scaling Europe’s innovations globally

Every day, thousands of startups worldwide launch innovative solutions tackling the world's most pressing challenges. Yet only a fraction successfully scales beyond home markets to achieve meaningful global impact.

With so many startups vying for impact, what distinguishes those that flourish from those that falter? And what can be done to improve their odds of success?

Why Europe’s startups struggle to grow

Coming up with a breakthrough idea is only the first step. Turning an innovation into a product or service that reaches customers across industries, borders, and use cases often proves much more difficult. And the truth is, most startups don’t make it that far.

Scaling is hard – especially in Europe, where market fragmentation, regulatory variation, and limited domestic scale compound the challenge. European startups are 30 percent less likely than their US peers to reach a successful outcome such as Series C, IPO, or acquisition (McKinsey & Company, 2020). Startups face a range of barriers in scaling beyond the early stages, including:

• Access to customers and markets: A startup in Europe must navigate 27 distinct markets, each with its own languages, regulations, and consumer expectations, to achieve the same scale as one in the US, which operates in a single regulatory and consumer landscape (Sifted, 2025).
• Access to capital: Early-stage funding is often available to prove a concept, but finding the right investment to expand internationally is far more difficult, especially in deep tech. European tech startups are half as likely to raise growth-stage rounds of over $15 million as their US counterparts, creating a growth-stage funding gap of $375 billion over the past decade (Atomico, 2024).
• Operational capacity: Scaling demands more than a strong product; it requires seasoned leadership, stable supply chains, robust compliance frameworks, and the infrastructure needed to scale efficiently. While Silicon Valley has spent decades nurturing startups into global tech giants, Europe’s scale-up environment is still catching up, with fewer talent networks and less collective know-how about expanding into new markets. For context, over the past 50 years, the EU has not produced a single company from scratch worth more than €100 billion. Meanwhile, all six American companies that now exceed $1 trillion in valuation were launched during the same period (European Commission, 2024).

These challenges are particularly acute for deep-tech startups, with higher technology risk, greater CapEx intensity, and longer development times than other startups (European Deep Tech Report, 2025). Deep-tech founders not only have to prove technical feasibility, they must also educate customers and investors to gain support.

At DEEP at ESMT Berlin, we work closely with dozens of such startups every year, from next-generation health diagnostics and quantum computing to natural capital and cybersecurity. Across these sectors, one theme is clear: brilliant science is necessary but insufficient. Strategic partnerships, market insight, and robust operational support are vital to bringing Europe’s revolutionary ideas to the global stage.

Corporates are key to startup scaling

In today’s business environment, established companies face growing pressure to innovate faster, adapt to disruption, and stay competitive in increasingly complex global markets. Traditional R&D often lags behind disruptive technologies, shifting consumer demands, and quick-moving market entrants.

Recognizing these limitations, many corporates now look to startups for fresh ideas, advanced technology, and entrepreneurial agility. They have learned valuable lessons about the opportunities these partnerships present, as well as the real cost of missed chances and superficial engagement.

In Europe, where market fragmentation and uneven access to capital make scaling especially difficult, these collaborations offer a critical edge. By leveraging their resources and networks, corporates help ventures bridge regulatory gaps and expand more efficiently across multiple markets, while simultaneously staying ahead of industry shifts through targeted innovation.

Done right, corporate-startup partnerships unlock strategic value (GlassDollar, 2023):

• Being ahead in future industries: A corporate customer validates a startup’s solution and accelerates its sales cycle. For corporates, it’s a chance to test and shape new tech early – before competitors do.
• De-risking new technologies: Startups gain instant legitimacy by aligning with a trusted brand – vital in sectors like health, energy, and finance. For corporates, these partnerships provide a low-risk window into emerging tech that would otherwise remain out of reach.
• Mutual capability building: Startups gain operational insight and infrastructure. Corporates gain access to next-gen talent and culture – often in areas like AI, deep tech, or climate tech where internal capabilities may lag. Without these partnerships, corporates risk stagnation while the early adopters move on.

But success is not guaranteed. Corporates must go beyond mere sponsorship or procurement and create frameworks for co-creation, strategic investment, and integration (GlassDollar, 2023).

Why money alone is not enough

For many startups, the toughest financial challenge comes when it’s time to scale. While it takes an average of 7 years to hit the $25 million revenue milestone for a “shallow tech” startup, deep tech requires 11 years and more than twice as much venture capital (European Deep Tech Report, 2025).

Despite improved early-stage funding across Europe, especially in digital sectors, the growth-stage gap persists, with 50 percent of late-stage funding still coming from outside Europe, particularly for deep tech and capital-intensive ventures (European Deep Tech Report, 2025).

What these ventures need is not just more capital but the right kind of capital. They require investors who understand international expansion, accept longer timelines, and provide strategic support beyond funding. Corporates can address this critical gap by investing in startups directly or joining as limited partners (LPs) in venture funds. Doing so fuels innovation aligned with corporate strategy and positions companies closer to emerging technologies and talent.

Public-private models are already showing promise. Germany’s €12 billion WIN Initiative aims to strengthen the venture ecosystem through blended finance. Through DEEP, ESMT is partnering with KfW Capital to train investors on effectively backing high-potential ventures – another way for corporates to prepare key personnel for investing in the future.

Startup-corporate partnerships in action

From late-stage commercialization to early-stage spinouts, DEEP supports breakthrough ventures at every step of the innovation journey. Below are two examples of how targeted mentorship, ecosystem access, and corporate collaboration can unlock scale.

From global scouting to co-creation with a Fortune 500 partner

In 2023, DEEP worked with a Fortune 500 company on critical sustainability challenges tied to one of its billion-dollar product lines. The project focused on material innovation, specifically improving natural fibers and developing advanced coatings that repel water and oils.

After evaluating over 1,500 CDL alumni ventures, five startups were selected for direct engagement based on technological compatibility, IP readiness, and co-creation potential.

The program culminated in focused meetings in which startups pitched solutions and corporate experts shared deeper insights into the technical needs and co-creation opportunities. In the end, one venture was selected to explore a potential pilot. Building on this success, we are preparing for a repeat collaboration to address 14 newly defined priority challenges.

This project underscores how targeted corporate-startup partnerships can compress timelines, unlock innovation, and create mutual value. Corporates access unprecedented technologies, while startups quickly connect with key industry players.

Corporate leaders shaping the strategy of deep-tech startups

Every year, DEEP identifies high-potential, science-based startups across fields such as healthcare, biotech, next-generation computing, and AI. Sourced from top-tier research institutions, these ventures are at a pivotal stage: their technologies are validated, their intellectual property is secure, and they are poised for global impact.

At this critical inflection point, DEEP connects these startups with an elite mentor bench of corporate leaders, entrepreneurs, and investors that offer the strategic insight, network, and expertise required to deliver high-impact, actionable advice. Over an intensive eight-week program, these mentors gain early exposure to groundbreaking technologies, while startups receive hands-on guidance to accelerate their growth. Working alongside industry pioneers and fellow innovators, corporate leaders actively shape what comes next in deep tech.

The tangible outcomes are clear: the program drives direct investments, generates patent filings, and leads to the development of go-to-market and pricing strategies for novel technologies, all while fostering strong connections between startups, R&D, and commercial teams for collaborative innovation.

Conclusion

To harness Europe’s unique potential in deep-tech innovation, corporate leaders must get personally involved in the dynamic ecosystem of startups and investors, positioning their organizations at the forefront of tomorrow’s industries. At the same time, they must learn from decades of successful corporate innovation and proven collaboration models to build robust innovation pipelines.

ESMT built DEEP to deliver exactly that, melding evidence-based startup collaboration with world-class mentorship and direct exposure to ventures ready to scale. From early-stage spinouts to global product breakthroughs with Fortune 500 partners, the DEEP model stands as a testament to alignment, experience, and real-world traction. For the founders building bold science and for the corporates ready to power their growth in Europe’s challenging yet opportunity-rich landscape, DEEP is where innovation turns into impact.