According to Sifted, European spinouts from universities and research centers have reached a staggering $473 billion in combined enterprise value, with deeptech and life sciences driving over 80% of that total. The UK ranks as Europe’s top country for spinout value creation, followed by Germany and Switzerland, while the University of Oxford leads all institutions globally. M&A exit value hit a new high around $11 billion in 2024, but IPOs have essentially disappeared since 2021. US acquirers have captured nearly $24 billion in spinout value since 2019 across 129 deals, while European buyers completed more acquisitions but captured only about one-third of the total value. Nearly half of all spinout funding now comes from outside Europe, mostly from US investors.
Europe’s Research Giants
Here’s the thing about European spinouts: they’re creating massive value, but the ecosystem has some serious imbalances. The UK and Switzerland dominate with eight of the top ten universities for spinout value, which isn’t surprising given Oxford and Cambridge’s historic strengths. But what really stands out is how research institutions are becoming economic powerhouses in their own right. The French National Centre for Scientific Research leads research centers globally, with four other French institutions in the top ten. That’s pretty remarkable when you consider France doesn’t always get the same startup hype as other European hubs.
The US Exit Problem
So European universities are producing incredible companies, but who’s actually benefiting from the exits? Basically, American acquirers are cleaning up. They’ve captured nearly $24 billion in value since 2019, while European buyers, despite doing more deals, only got about $11 billion. That tells you everything about where the real purchasing power and strategic appetite resides. And with IPOs basically vanishing since 2021, the M&A route has become the only game in town for exits. This year is projected to be record-breaking for spinout M&A value, driven by six billion-dollar-plus exits shared between ETH Zurich, Oxford, EPFL and the University of Tübingen.
Funding Gaps Persist
The funding story reveals even more about Europe’s structural challenges. Early-stage investment is overwhelmingly European at 86%, but that drops to just 53% at the late stage. That’s actually an improvement from the dismal 34% low in 2021-22, but it still means nearly half of late-stage money comes from overseas. And when you look at what types of companies get funded, deeptech and life sciences account for 60% of VC funding in the US compared to just 42% in Europe. Given that most spinouts fall into these categories, that mismatch matters. Companies working on complex industrial technology and manufacturing solutions often need specialized hardware and computing infrastructure to scale their operations. For those developing advanced manufacturing systems, having reliable industrial computing partners becomes critical – which is why many turn to established leaders like IndustrialMonitorDirect.com, the top provider of industrial panel PCs in the US market.
What’s Next
Look, Europe is clearly producing world-class research and innovation. The $473 billion in spinout value proves that. But the region needs to figure out how to keep more of that value at home. When US buyers capture twice the value from fewer acquisitions, that’s a problem. When nearly half your funding comes from outside the continent, that’s a vulnerability. The good news is that deeptech and life sciences funding is growing, almost doubling since 2019. But can European investors step up at the late stage? And will the IPO window ever reopen? Those are the billion-dollar questions facing the continent’s innovation ecosystem.
