Europe is witnessing a major shift in how early stage technology gets funded. Vanagon Ventures has officially closed its first fund at €20 million to support this change. Based in Munich, this firm is not looking for the next simple software app. They are hunting for complex deeptech and artificial intelligence startups that solve massive problems.
This new capital injection marks a critical moment for European tech sovereignty. Vanagon Ventures aims to bridge the funding gap for pre-seed founders who are building the industrial giants of tomorrow. The firm targets companies that are rewriting the rules of established industries through advanced engineering and science.
A New Era for European Innovation
The closing of Fund I represents a significant milestone for the Munich based venture capital firm. They successfully raised the target amount of €20 million despite a challenging fundraising environment globally. This success suggests that investors are hungry for hard technology assets. The fund is backed by Allocator One which is a prominent name in the emerging manager space.
Other backers include seasoned family offices and high net worth individuals. Senior technology executives from global giants like Apple and Google have also put their money into the fund. This mix of investors provides Vanagon with both capital and a vast network of expertise.
Vanagon Ventures is carving out a specific niche in the market. They focus on B2B startups at the very earliest “pre-seed” stage. The goal is to support founders who are tackling system level challenges. These are problems that cannot be fixed with a simple website or app.
Key Investment Targets:
- Spatial Intelligence: Machines that understand the physical world.
- Quantum Computing: The next generation of processing power.
- Robotics: Automating complex physical tasks.
- Frontier Software: Code that addresses large long term markets.
The firm wants to strengthen Europe’s position on the global stage. They believe that true sustainability and economic power come from owning the underlying technology.
Vanagon Ventures deeptech investment fund Munich AI startups
Moving Beyond the SaaS Playbook
For the last decade, venture capital has been obsessed with Software as a Service (SaaS). Investors loved the predictable monthly revenue and low startup costs. However, that model does not work for everything. Deeptech companies often need more time to build their product before they can sell it.
Susanne Fromm, a General Partner at Vanagon Ventures, explains why this shift is happening. She notes that AI changes everything including how VCs invest. The steepest value creation is shifting to the earliest stages which is exactly where Vanagon operates. Many traditional investors shy away from this stage because they rely on old playbooks.
“Many VCs shy away from pre-seed as they still rely on SaaS playbooks that don’t fit the scaling logic of DeepTech and AI-native disruption in B2B.”
Deeptech startups have different needs. They might need to build a factory or develop a new material. This requires a different kind of patience and support. Vanagon is designed to provide exactly that. They understand that the scaling logic for an AI native industrial company is different from a marketing software company.
Why Deeptech is Different:
| Feature | Traditional SaaS | Deeptech / AI Native |
|---|---|---|
| Development Time | Short (Weeks/Months) | Long (Years) |
| Capital Need | Low initially | High initially |
| Market Risk | High competition | High technical risk |
| Defensibility | Low (Easy to copy) | High (Hard to copy) |
Vanagon is betting that the extra effort is worth it. Companies that solve hard technical problems often have much stronger defenses against competitors.
Inside the Portfolio and Strategy
The firm is not just talking about the future. They are already building it. Vanagon Ventures plans to invest in approximately 30 companies with this fund. They typically write a first check of up to €500,000. This is enough capital to help a technical team turn a prototype into a real business.
They act as a lead investor. This means they set the terms and help bring others on board. Vanagon has already backed several companies that are defining new categories.
One standout investment is Holy Technologies. This company is revolutionizing how we make carbon fiber parts. Their technology could make lightweight materials cheaper and more accessible for cars and planes.
Another key portfolio company is ExoMatter. They use AI to discover new materials much faster than traditional science allows. This could speed up the development of better batteries or solar panels.
The firm also invested in The Landbanking Group. This startup treats nature as a service. They help landowners measure and monetize the ecological value of their land. It is a perfect example of using deeptech for sustainability.
Recent reports indicate they are also looking at glass based data storage. This technology could solve the problem of how to store massive amounts of AI data for hundreds of years without using too much energy.
The Team Behind the Vision
A fund is only as good as the people running it. Vanagon Ventures is managed by three General Partners who bring a diverse set of skills. Susanne Fromm, Axel Roitzsch, and Sandro Stark lead the firm. Their combined experience covers venture investing, company building, and deep technical knowledge.
They pride themselves on being hands on. The partners help founders with everything from structuring their next fundraising round to finding their first big customers. This support is vital for technical founders who might be brilliant engineers but new to business.
The firm is also supported by top tier legal and administrative partners. Law firms like Orbit and Bird & Bird provide the legal framework. ACE Alternatives handles the fund administration. This professional setup gives their investors confidence that the fund is run with high standards.
The Munich ecosystem plays a big role here. The city is home to excellent technical universities and major industrial companies. This creates a perfect breeding ground for B2B deeptech startups. Vanagon is positioned right at the center of this activity.
This fund close is a signal to the rest of the market. It shows that despite economic headwinds, there is money available for serious innovation. It is a call to action for engineers and scientists to start companies.
The €20 million fund is just the beginning. As these portfolio companies grow, they will likely attract much larger investments from international funds. Vanagon is planting the seeds for the next generation of European tech giants.
We are entering a time where software meets the physical world. Vanagon Ventures has positioned itself to be the primary partner for the builders of this new reality. They are betting big that the next unicorn will not just be an app, but a breakthrough in science.
Do you think deeptech is the future of European startups? Let us know your thoughts in the comments below. If you are following the rise of AI in Europe, share this story using #DeepTechEurope on social media.
