Europe’s innovation landscape is undergoing a transformation, and university spin-offs are at the center of this evolution. The newly published report, Spin-offs: Reinforcing a Vector of Value Creation for EU-27, dives deep into how academic institutions are fueling economic impact through tech transfer, while also uncovering key challenges that prevent spin-offs from fully leveraging the Deep Tech boom.
DEEP Ecosystems is proud to be a key partner in the StepUp StartUps project, a European Commission-funded initiative aimed at reshaping Europe’s startup ecosystem. Together with Barrabes, Leibniz IRS, Startup Europe Regions Network (SERN), and EU Startups, DEEP is spearheading a two-year journey to develop data-driven insights, conduct research, and organize events to inform policy transformation.
The primary objective of StepUp StartUps is to provide a comprehensive understanding of the functioning of national and local startup and scaleup ecosystems across the EU-27 and EFTA countries. This knowledge will inform the development of data-driven policy reports on key issues and challenges facing Europe’s startup ecosystem.
Spin-Offs: A Vehicle for Economic Growth
Universities across the EU-27 are increasingly prioritizing their ‘third mission’—knowledge transfer and commercialization. Spin-offs play a crucial role in translating research breakthroughs into viable businesses, stimulating local economies, and creating high-value jobs. According to the report:
- Spin-offs remain remarkably stable – Less than 10% of spin-offs shut down within a few years, a significantly lower failure rate than traditional startups.
- Funding rounds happen faster in the EU – While EU-27 spin-offs may have a slightly lower initial success rate in attracting funding, those that do raise capital tend to secure follow-on investments more quickly than their UK and Israeli counterparts.
- Deep Tech investments are surging – Europe’s share of global Deep Tech funding has nearly doubled, from 10% in 2019 to 19% in 2023.
Challenges Holding Back Spin-Off Growth
Despite these positive trends, spin-offs in Europe face several barriers that prevent them from reaching their full potential. The report identifies:
- Limited exits – Acquisitions and IPOs remain rare, making liquidity events less frequent than in the broader startup ecosystem.
- Underutilization of Deep Tech potential – While Deep Tech companies thrive in Europe, only 23% of Deep Tech startups are spin-offs, and they account for just 11% of total Deep Tech valuations.
- IP and regulatory complexity – Differences in intellectual property (IP) policies across member states lead to inconsistent licensing and equity-sharing agreements, creating unnecessary friction in technology transfer.
Key Strategies for Unlocking Spin-Off Success
The report outlines essential actions to improve the spin-off ecosystem:
- Harmonizing IP Policies – Standardized, transparent IP transfer processes can streamline commercialization and encourage researchers to pursue entrepreneurship.
- Balanced Financing Approaches – A shift from grant-heavy funding to equity-based investment models is needed to attract venture capital and incentivize long-term growth.
- Empowering Technology Transfer Offices (TTOs) – Strengthening TTOs with more staff and expertise can accelerate spin-off creation and ensure better business development support.
- Building Entrepreneurial Teams – Successful spin-offs require a combination of technical talent and business leadership; universities should prioritize assembling well-rounded startup teams rather than relying solely on individual researchers.
The report provides a roadmap for universities, investors, and policymakers to create a more cohesive and growth-oriented spin-off ecosystem. With structured reforms in IP management, financing mechanisms, and talent development, EU-27 spin-offs can become a dominant force in the global Deep Tech arena.
Read the full report to explore in-depth data insights, best practices, and policy recommendations that will shape the future of university-driven innovation in Europe.
We invite you to participate in discussions that will shape the future of EU innovation. By joining our network, you can contribute to the development of supportive policies and initiatives for startups and innovators across Europe. DEEP is a group of industry leaders who inspire us to explore new trends and policy needs. Join our network to collaborate on data, exchange insights, connect with key players, and share your own perspectives.
The project is funded by the tender of the European Commission on “European Start-ups 2.0 – Taking Europe’s start-up economy to the next level through data-driven insights, research and events” with number CNECT/2022/OP/0133. Views and opinions expressed are however those of the authors only and do not necessarily reflect those of the European Union, European Commission or the Council of Europe. Neither the European Union nor the granting authority can be held responsible for them.