In the 2010s, software-as-a-service (SAAS) dominated venture capital returns. Predictable revenue models and rapid growth drew unprecedented levels of investment. By the middle of the next decade, though, this model had matured. Competitive intensity, margin pressure and slowing growth began to expose its limits (PitchBook, 2024). The strategic context had shifted. Geopolitical fractures, supply chain shocks during the pandemic, and a resurgence in defense spending created a different set of priorities (Financial Times, 2023). NATO members, for example, have pledged to move defense budgets towards 5 per cent of GDP by 2035 (NATO, 2023). Governments across the US, Europe and Asia are onshoring semiconductors, batteries and rare minerals, increasingly treating technology sovereignty as a matter of national security (European Commission, 2022). In this environment, resilience rather than recurring revenue has become the guiding investment thesis.
The result is a decisive swing towards deep tech: quantum computing, biotechnology, advanced energy, robotics and other fields that underpin resilient economies. Governments and corporations are pouring in unprecedented sums. Washington’s CHIPS and Science Act earmarks $280 billion for semiconductor capacity and R&D (White House, 2022); Brussels has committed €43 billion under its own Chips Act (European Commission, 2023); Japan is subsidising chipmakers to the tune of roughly ¥2 trillion (METI Japan, 2023). Toyota alone plans $13.5 billion in battery R&D by 2030 (Toyota, 2021), while Google, IBM and Microsoft have each expanded billion-dollar quantum computing programmes (IBM, 2022; Microsoft, 2023).
Defense and dual-use technologies are attracting similar levels of capital. Anduril raised $1.5 billion in 2022, Helsing.ai secured €600 million in 2025 (TechCrunch, 2025), and NATO has launched a billion-euro innovation fund dedicated to frontier security technologies (NATO, 2023). Venture firms are adjusting accordingly: Andreessen Horowitz is raising nearly $7 billion across new funds, including its “American Dynamism” vehicle focused on aerospace, defense and manufacturing (a16z, 2023). Institutional investors are also taking notice. Breakthrough Energy Ventures, backed by Bill Gates, has raised more than $2 billion for climate and energy resilience startups (Breakthrough Energy, 2022).
The attraction of deep tech is clear, and the challenges are just as significant. Timelines are long, capital requirements heavy, and risks substantial. Biotech drug approvals can take over a decade (FDA, 2022), while hardware-intensive quantum companies such as PsiQuantum have raised hundreds of millions before generating revenue (PsiQuantum, 2023). Venture funds pursuing this space must operate as patient capital, balancing high-risk frontier bets with faster-returning portfolio companies (OECD, 2023).
Case studies show how public support can de-risk fundamental technologies. For example, SpaceX gained early traction through NASA’s COTS contract, which gave private investors confidence in its rocket programme (NASA, 2008). Moderna’s mRNA platform was accelerated by a DARPA grant in 2013, enabling the rapid development of its COVID-19 vaccine (DARPA, 2013). Northvolt’s rise in Europe followed a similar pattern: billions in loans and subsidies from EU and Swedish agencies, equity from automakers such as Volkswagen, and $55 billion in pre-orders that gave its gigafactory network a guaranteed market (Northvolt, 2022). These examples demonstrate how government, corporate and venture investors increasingly converge to turn scientific breakthroughs into scaled systems.
Corporate venture arms are integral to this alignment. BMW i Ventures’ investment in Plus One Robotics feeds directly into the carmaker’s logistics automation (BMW, 2022). Pfizer Ventures backs biotech startups relevant to its drug pipelines (Pfizer, 2022). Shell Ventures targets carbon capture and battery technologies it can integrate into existing energy infrastructure (Shell, 2023). Strategic alignment is the hallmark: startups gain capital and credibility, corporates secure early access to innovation, and both sides benefit when the partnership is structured with enough flexibility to let the new company grow (CB Insights, 2023).
Fusion power illustrates the scale of collaboration required. Government spending provides a baseline of R&D support (DOE, 2022), but private venture investors have poured billions into companies such as Commonwealth Fusion Systems (CFS, 2023) and TAE Technologies (TAE, 2023). Corporate partners including Google, Chevron and Eni have added capital and technical expertise (Google, 2023). Fusion’s prospects depend on this mix: public underwriting of science, venture willingness to fund scale-up, and corporates that can ultimately commercialise the technology. The same pattern was visible during Operation Warp Speed in the US, which compressed a decade of vaccine development into a year by underwriting both clinical trials and manufacturing capacity (OWS, 2021).
Looking ahead, synthetic biology, long-duration batteries, quantum computing and dual-use AI robotics are all emerging as frontier domains. Ginkgo Bioworks is building biofoundries for agriculture with Bayer (Ginkgo, 2022); Form Energy has raised more than $1.2 billion for its iron-air batteries (Form Energy, 2023); DARPA is backing tactical quantum sensing (DARPA, 2025); and Shield AI has raised hundreds of millions to develop autonomous drones (Shield AI, 2025). Global venture data confirm the trend: deep-tech deals accounted for around 10 per cent of total funding in 2016, rising to roughly 20 per cent by 2024 (PitchBook, 2024).
The landscape for venture investment has shifted decisively. Where software once defined growth, resilience now drives capital flows. Deep tech is slower, riskier and far more capital-intensive, but it is increasingly viewed as essential to economic security. In a world of fractured geopolitics and fragile supply chains, the startups that matter most are those capable of anchoring resilient industries for decades to come.
