Deeptech Mash: Episode 2

In this fireside chat, AlbionVC’s electric duo Dave and Seb delve into key trends in deeptech, particularly in AI and hardware, and their implications for founders and investors. 

Overview of the key themes this duo is excited about at the moment below, but for a spicier version watch full the conversation here:

DeepTech growth in the UK

• Quantexa’s $175M raise highlights the UK’s potential to build global AI category leaders
• Encouraging signs as UK deeptech companies scale instead of relocating abroad
• Our latest research in collaboration with Beauhurst reveals that the average deal sizes are rising, with 38% of “Future of Compute” deals done over the past 2 years surpassing £10M

Scaling challenges & geopolitics

• Early adoption of deeptech remains US-led, but UK startups with a technical edge are competing globally
• Geopolitical shifts are impacting semiconductor, AI, and processor markets—UK research talent is increasingly valuable

London: a DeepTech powerhouse

• Nearly half of UK deeptech companies are based in London, driven by top-tier universities and investor networks
• London universities are second behind the University of Oxford in the number of Compute spinouts
• The concentration of talent, research, and access to global markets creates a thriving innovation ecosystem
• The recycling of talent from past exits (Graphcore, Darktrace) is strengthening the ecosystem

Defence Tech, AI & Sovereignty

• It is time for Europe to rethink its defence strategy, relying on tech innovation instead of military expansion
• AI-driven electronic warfare and autonomy are reshaping security landscapes
• The UK doesn’t need to compete with OpenAI or Anthropic but should focus on AI applications & compute infrastructure