Generational growth themes

Technical breakthroughs are necessary but not sufficient. A prototype does not sell itself. Turning an edge into a company requires commercial ambition, technical credibility, and relentless execution. Buyers exist across sectors, from governments to industrial firms to strategic partners, but only those with the vision and persistence to connect the dots can capture their demand.

We describe our edge as two pillars, Frontier Taste and Industrial Judgement:

• Frontier Taste: seeing signal before consensus, recognizing the technological edge and the founders that will define the next industrial era before the world has language for them.
• Industrial Judgement: knowing what turns that edge into an enduring, globally consequential industry, and reading the markets, regulatory constraints, and strategic choices that decide it.

Timing sets the return. We aim for the inflection point where technical risk turns into engineering risk, where the market is still mispriced, and where the first buyers are becoming evident. Earlier than that, the technology does not yet work and there is no market signal: the bet feels brave but it is blind. Later, the technology is proven and the price has caught up: the bet feels safe but it is expensive. The inflection point feels ambiguous, and that is where the asymmetry is widest.

Deep tech investing means helping founders turn a technical edge into revenue. Our role is active: we provide capital, expertise, and connections, keeping founders on the path from concept to execution.

We run a repeatable system to find, back, and scale these companies: see it, win it, scale it.

• See it: thesis-driven sourcing across our six themes, drawing on portfolio founders, industry networks, patents, conferences, and proprietary screening tools to spot inflection points before they are obvious.
• Win it: the best founders have choices, so we speak their language, lead rounds, set fair terms, and form the consensus.
• Scale it: we show up when the work is hardest, on strategic repositioning, financing strategy, commercial positioning, talent, and ecosystem access.

Deep tech reaches scale when embedded in systems that join software, compute, and production. New Industrials combine breakthrough technology with automation, manufacturing, energy, and infrastructure, creating systems the modern economy depends on.

Global trends define the opportunity:

• China’s dominance across electrification, advanced materials, and industrial capacity.
• Fragmentation of supply chains and the push for national resilience.
• The return of inflation and the end of cheap capital.
• Strategic competition in a multipolar world.
• Europe’s engineering heritage, precision manufacturing, and materials expertise.

The bottlenecks today are system-level: batteries, semiconductors, energy generation, precision manufacturing, compute capacity, and the control software that ties these assets together. AI, software, and digital services now rely on these foundations. Firms that can combine deep tech with operational execution can occupy positions that software-only companies cannot reach.

One idea we are increasingly building around is what we call the data dividend: the compounding value that appears when materials science, computation, and systems engineering converge under real adoption pressure. Data alone creates no value; the advantage goes to whoever turns physical and biological reality into usable, instrumented knowledge. Much as Lean Production once reshaped manufacturing through discipline and structure, this is a Lean Production 2.0 for information flows, and it recurs across several of our themes below.

Across all of this, Vsquared’s six Generational Growth Themes (GGTs) provide concrete focus for our investments:

1. 01Energy Transition
2. 02New Space
3. 03Compute & Sensing
4. 04Robotics & Manufacturing
5. 05AI & Next-Gen Software
6. 06Tech Bio

These themes are diverse, but each follows the same method. The common thread is the approach itself: identify technical edge, invest early, help founders scale, and integrate deep tech into systems that can serve current markets or open new ones.

Even amid disruption, some truths endure. Long-term value comes from understanding constants:

• Nations will always need secure energy, materials, and compute.
• Buyers value reliability, cost efficiency, and resilience.
• Scaling complex technologies always requires time, expertise, and disciplined execution.
• Strong relationships between investors and founders matter over years and cycles.

We engage founders early, actively filling gaps and helping align resources. We push hard, set milestones, and maintain momentum, because speed matters even in long-term investing.

New Industrials require a different approach than traditional venture capital. We select companies that can demonstrate commercial proof points early, validating technical and market fit before requiring substantial capital.

Financing New Industrials increasingly means blending capital types to match risk to stage, what we think of as production capital. Venture equity funds early engineering and first customers; grants, asset-backed loans, credit lines, and pre-orders fund production and industrial execution once commercial viability is proven.

Deep tech creates early defensibility through intellectual property, infrastructure, process knowledge, and deep embedding in the right, talent-rich ecosystem. Strategic integration with larger industrial partners can accelerate growth, secure supply chains, and reduce market risk, but it is only one route. Other firms achieve success by creating new markets or displacing incumbents when a superior system lets them move faster and more efficiently. In each case, the outcome is the same: firms that control critical systems, build structural advantages, and generate higher-value, faster exits.

Since 2016, we have proven this approach: early investments in Isar Aerospace, IQM, The Exploration Company, and NEURA Robotics show that recognizing the edge, backing founders early, and actively building scale turns audacious ideas into industry leaders, with outcomes that now include IQM having gone public and NEURA Robotics emerging as one of the fastest-growing robotics companies in the Western world.

Our edge comes from pairing Frontier Taste with Industrial Judgement. We invest early, push hard, and help founders navigate markets, scale operations, and secure strategic positions. The path from deep tech to New Industrials is hard, but it is where durable, outsized returns are realized.

The convergence of technological breakthroughs and global trends has created the moment we anticipated. Our role is to identify the improbable, back it decisively, and turn potential into real, scalable industrial leadership across all six of our Generational Growth Themes, whether that means working with incumbents, building new markets, or reshaping old ones.

The first trillion-dollar company out of Europe will start as a signal most people dismiss. We have never been most people.

The End of the Petrostate

For over a century, energy was a game of geology. Nations rose and fell based on what they could extract. Power was finite, geographically constrained, and extractive. That era is ending. We are moving from the age of petrostates to the age of electrostates.

Energy is now a technology to be manufactured. Solar panels following Wright’s Law are becoming cheaper than coal in many markets, and small modular reactors (SMRs) will soon be built on assembly lines. The constraint shifts from controlling land to mastering technology such as solar, batteries, power electronics, electrolyzers, and heat pumps. This transition restructures the global industrial base.

The Rise of Programmable Power

The future grid is a software-defined, intelligent network. We are witnessing the birth of programmable electricity, where energy is responsive, optimizable, and integrated with the digital world through demand response, advanced inverters, energy-management-system platforms, and grid-edge controls.

Our investment thesis centers on the Electric Tech Stack, the physical foundation of this transition, including batteries, motors, power electronics, and semiconductors, with portfolio companies such as Group14, Hyperscale Power, and cylib already building across it. We back the infrastructure that turns energy into a competitive advantage:

• Grid flexibility: As renewables introduce intermittency, the grid must adapt. We invest in “infrastructure-plus-flexibility” technologies that combine generation with smart load balancing and energy management systems to stabilize networks.
• Storage & resilience: We explore long-duration storage solutions, including thermal, chemical, and emerging material-based approaches. These systems are essential for a fully renewable energy system.
• Decarbonized heat: Electrification extends to heat. We back companies replacing fossil-fuel boilers with advanced heat pumps and thermal storage for heavy industry, tackling a large, often overlooked source of emissions.

Energy as the Substrate

Energy is no longer another vertical. It is the substrate under everything else. Training frontier AI models consumes power on the scale of entire cities, higher energy density drives new capabilities in wearables and devices, and data centers demand steady, localized supply. This is where the data dividend begins: the sensing and actuation layers together, from real-time grid data to the power electronics, HVDC lines, and solid-state technologies that make software-defined distribution physically possible. We invest across that full stack, ensuring AI and industrial growth stay aligned with energy availability.

The European Edge: Complexity as Opportunity

Europe’s diverse energy landscape creates demand for sophisticated integration solutions. The continent’s fragmented grids, varied generation mix, and industrial base require technologies that can handle complexity rather than assume uniformity.

This environment favors companies building adaptive systems. From carbon transformation technologies to advanced nuclear capabilities, Europe’s industrial structure rewards solutions that work across heterogeneous networks and hard-to-abate sectors. Policy mechanisms like CBAM accelerate adoption, but the underlying demand stems from industrial reality, not regulation.

From Prototype to Industrial Scale

At Vsquared, we pair Frontier Taste with Industrial Judgement:

• Frontier Taste: We read the fundamentals early, grounding investments in techno-economic inevitability: efficiency gains in heat pumps, cost curves of solar, energy density of nuclear power.
• Industrial Judgement: We integrate these technologies into legacy grids and complex markets. Energy transition startups require both technical expertise and industrial scale.

We support founders building the factories, reactors, and storage systems that will power the next century.

We are backing the architects of the Electrostate.

Build the future of the Energy Transition with Vsquared.

From Exploration to Industrial Scale

For decades, space was the domain of bespoke government missions, costly, rare, and limited in scope. That era is ending. We are moving from exploration to an orbital industry built for repeat use, high output, and commercial scale.

Radically lower launch costs, driven by reusable rockets, are opening access to orbit. The constraint no longer lies in reaching space but in how much we can place and operate there. This shift turns rocket firms into infrastructure providers and pulls the sector from early concepts to working hardware and growing services.

The Shift to Physical Systems

The digital economy now rests more and more on hardware. Space systems are part of that shift. New Space companies bring software and automation into complex physical systems to work at high repeat rates and low cost.

Our investment thesis focuses on the parts of this system that make space a strategic asset:

• Next-generation launch: Launch costs have dropped by more than 200x since the 1960s. We back companies that widen global access and ensure Europe does not depend on one supplier. Isar Aerospace stands at the center of this effort, building a European launch system that can scale and give the continent independent access to orbit.
• Orbital infrastructure: As more satellites fly, the network in space needs support craft. We invest in vehicles that move payloads between orbits and bring cargo back to Earth. The Exploration Company leads here with orbital vehicles that carry goods and, over time, people.
• Space data and connectivity: Communications and earth-observation satellites now serve as strategic tools. We back companies that build and run constellations that nations and industries rely on, including constellr in high-resolution earth observation and Morpheus Space in in-orbit mobility.

Demand from States and Industry

Space demand is rising because governments, defense groups, and critical industries need secure access to launch, data, and orbital services. This is not short-term or optional. States want resilience and autonomy, and private firms need stable links and insight from orbit. This creates steady, long-range demand for launch and in-space systems.

Europe’s Edge: Talent, Flexibility, and a Clear Model to Follow

The European space industry starts with major strengths. The continent has deep engineering talent, strong manufacturing, and modern supply chains. It also benefits from lower barriers to employing international talent and fewer export restrictions, giving European firms broader access to global expertise and markets.

Europe can also learn directly from the model SpaceX has proven. SpaceX showed how launch, satellites, and services can reinforce one another and scale into a global business. Europe does not need to guess the model. It has a working blueprint. The aim now is not to copy it line by line but to build a sovereign version suited to Europe’s strengths.

From Isar Aerospace to The Exploration Company, Europe already has firms that combine talent, modern production, and speed. They prove that the continent can build competitive systems without relying on legacy structures.

From Prototype to Industrial Scale

At Vsquared, we pair Frontier Taste with Industrial Judgement:

• Frontier Taste: We ground decisions in engineering and economics, from engine performance to learning curves that shape launch cadence and production output.
• Industrial Judgement: We help teams scale from working hardware to reliable, repeatable space systems. This means raising flight cadence, building stable engine lines, and setting up orbital operations that support the next wave of spacecraft and services.

We back founders building rockets, vehicles, constellations, and orbital factories that will define the next century of industrial capability.

We are backing the builders of Europe’s orbital industry.

Build the future of New Space with Vsquared.

Breaking the Von Neumann Bottleneck

For decades, computing relied on a simple architecture: the separation of processing and memory. This structure powered personal computing and the internet. In the age of AI, however, it limits speed and consumes excessive energy. Moving massive datasets between processor and memory accounts for the largest share of energy use in deep neural networks.

Next-generation intelligence requires new hardware rules. Compute is now transforming at three levels: memory-centric architectures that compute where data resides, paired with inference-specific chips; edge processing that runs where data originates; and electro-optics innovation spanning components to manufacturing. Memory-centric designs alone already demonstrate 10–100x reductions in AI energy consumption. Companies like Synthara are leading this shift, enabling portable devices to handle AI workloads efficiently.

We also back the manufacturing layer beneath next-generation compute, from LACE Lithography in post-EUV patterning to Black Semiconductor in photonics interconnects and Snowcap in superconducting digital chips.

Computer Sensing: The Eyes of the Machine

Machines are gaining new ways to perceive the world. Sensors now form part of vertically integrated systems where hardware combines with AI to measure, interpret, and act on phenomena beyond human perception.

• Sensing: We back technologies that commercialize physical principles, such as quantum cascade lasers (QCL) and photoacoustic spectroscopy, to capture previously inaccessible data.
• Vertical integration: We seek companies that deliver complete outcomes, not just hardware. Quantune Technologies exemplifies this with continuous, non-invasive molecular monitoring.
• The edge: Processing data on-device reduces latency and energy use, enabling embodied AI that interacts directly with the physical environment.

The Compute Layer of the Data Dividend

Compute is where much of the data dividend is captured. Value accrues to the architectures closest to data generation, the systems that make raw signals AI-ready at the lowest energy and latency cost. This is why the shift from general-purpose GPUs toward specialized, power-efficient designs matters: it is the physical substrate that lets instrumented data compound into advantage. Software performance now depends on the hardware it runs on, and the two co-evolve.

From Prototype to Industrial Scale

At Vsquared, we pair Frontier Taste with Industrial Judgement:

• Frontier Taste: We focus on breakthroughs with measurable impact, from near-term advances like in-memory computing to longer-horizon approaches such as alternative computing architectures that go beyond silicon.
• Industrial Judgement: We navigate the path from breakthrough to industrial system, supporting the scale-up of factories, supply chains, and production-ready hardware.

Europe has a strong industrial foundation in high-end manufacturing, optics, and physics. The continent can lead the development of hardware that underpins the next wave of AI.

We are backing the engineers who are rewiring the global nervous system.

Build the future of Computing & Sensing with Vsquared.

The End of the Software Era

For two decades, value creation centered on digital products that scaled without physical constraints. Code could be copied infinitely, deployed globally, and improved through iteration alone. That era is ending. We are moving from the age of frictionless software to the age of the New Industrial Order, where value returns to physical production, automation, and the integration of intelligence into the material world.

Manufacturing faces a demographic reality that software never encountered. Europe’s working-age population is contracting. Automation has shifted from a productivity advantage to an industrial necessity. This transition restructures how value is created and where capital flows.

The Shift to Integration and Uptime

The primary constraint in robotics is no longer hardware capability. Robots can perform complex tasks. The bottleneck lies in deployment, integration, and sustained operation. We call this the democratization problem: making automation accessible to small and medium enterprises operating high-mix, low-volume production.

Our investment thesis centers on the software and systems that unlock existing physical assets:

• Cognitive automation: We back platforms that allow non-specialists to program and deploy robots. NEURA Robotics exemplifies this approach with humanoid systems designed for industrial and care environments. The differentiation lies not in hardware alone but in deployment velocity, system reliability, and partnership models where risk and upside are shared with customers.
• Orchestration layers: Value lies in software that acts as a conductor, coordinating multiple robots, sensors, and systems into adaptive workflows. This transforms disconnected hardware into coherent production systems.
• Structured data capture: Modern manufacturing generates continuous operational data. This is the data dividend on the factory floor: platforms that preserve causal signals and context turn production failures into high-fidelity training data, and because a learning controller is specific to one system’s physics, that data compounds into system-level lock-in over time.

The Demographic Stack

Labor supply is contracting across developed economies. This creates non-negotiable demand for automation in sectors previously resistant to it. Healthcare and eldercare face the most acute pressure. Through 2026 and beyond, robots are beginning to enter European care facilities to handle daily support and monitoring tasks.

We invest in systems that address this demographic reality with reliability and safety, moving automation from theoretical capability to deployed infrastructure in regulated environments.

The European Edge: Scale Without Mass

Europe cannot match China’s industrial volume. The continent’s advantage lies in precision, complexity, and ecosystem integration. We call this “Scale Without Mass”: leveraging intelligence, optimization, and tight cluster networks to capture the benefits of mass production without replicating physical output at Chinese scale.

From ASML to Siemens, Europe leads in high-value manufacturing where precision and system integration matter more than unit cost. The next generation of European industrial champions will build on this foundation, applying AI and robotics to domains where quality and reliability determine competitive position.

From Prototype to Industrial Scale

At Vsquared, we pair Frontier Taste with Industrial Judgement:

• Frontier Taste: We focus on measurable constraints, from deployment velocity to uptime rates. Success in robotics depends on co-developing business models with customers, iterating together over months until novel productive automation systems emerge.
• Industrial Judgement: We support founders navigating the path from working prototypes to systems that operate reliably in production. This requires partnership models that mirror Lean Production’s emphasis on supplier coordination, risk-sharing structures, and financial approaches that fund physical assets without excessive dilution.

We back founders building the orchestration layers, cognitive systems, and data infrastructure that make automation deployable in environments where consequence and regulation set the standard.

We are backing the architects of the New Industrial Order.

Build the future of Robotics & Manufacturing with Vsquared.

The End of Software Exceptionalism

For two decades, software operated under exceptional rules. It scaled without physical constraints, improved through iteration alone, and ate industry after industry. That era is ending. We are moving from the age of frictionless software to the age of software bounded by hardware, energy, and trust.

The industry has passed the phase where raw model capability defines competitive advantage. The constraint now lies not in what models can do in controlled settings but in making them reliable, auditable, and deployable in systems where failure carries consequence. This transition restructures where value accumulates in the stack.

The Shift to Trustworthy Operation

Modern AI systems face a reliability gap. They perform well in demonstrations but fail the requirements of regulated and high-constraint industries. We call this the 90% problem: sufficient for a prototype, insufficient for a supply chain, hospital, or defense system.

Our investment thesis centers on the infrastructure that closes this gap:

• Evaluation and assurance: As AI enters mission-critical domains, organizations require tools to measure agent behavior, detect drift, and analyze failure modes. We back companies like Arlequin, which builds analytical capabilities to define and verify trustworthy AI for high-stakes applications.
• Privacy-preserving compute: Europe’s regulatory environment drives innovation in computation on encrypted data. We invest in technologies like fully homomorphic encryption that allow AI to learn from sensitive datasets without exposing raw information. Zama leads this space, enabling secure collaboration across institutions.
• Structured data infrastructure: Value shifts from those who accumulate the most data to those who preserve causal signals and temporal dynamics. We back platforms that turn laboratories and factories into continuous data engines where even failed experiments yield high-fidelity training data.

The Capture Layer of the Data Dividend

This theme owns the point where the data dividend is realized. Strategic leverage shifts to the platforms closest to data generation, the ones that turn raw physical and biological signals into AI-ready knowledge. Because models extracted from measurements are reliable only on the hardware they are tuned for, this capture layer creates strong lock-in and high switching costs. Software performance now depends on physical systems, and the value accrues to whoever owns the layer that transforms noise into deployable signal.

The European Edge: Privacy as Infrastructure

Europe’s regulatory framework does not hinder digital innovation. It creates demand for privacy-preserving technologies that become competitive advantages. GDPR and similar standards force the development of secure, federated systems that allow collaboration without centralized data control.

From encrypted computation to sovereignty stacks, Europe is positioned to lead in building the digital rails that enable AI deployment in sectors where trust and security determine adoption.

From Prototype to Industrial Scale

At Vsquared, we pair Frontier Taste with Industrial Judgement:

• Frontier Taste: We ground investments in measurable constraints, from energy consumption in training runs to failure rates in production deployments.
• Industrial Judgement: We support founders navigating the path from impressive demonstrations to systems that operate reliably in the physical, regulated world. This requires both technical depth and industrial rigor.

We back founders building the evaluation tools, privacy layers, and data infrastructure that make AI deployable in domains where consequence matters.

We are backing the architects of mission-critical intelligence.

Build the future of AI & Next-Gen Software with Vsquared.

From Artisanal Discovery to Engineering Biology

For decades, life sciences operated on a model of artisanal discovery: high-risk, capital-intensive, and binary, a decades-long wager on a single molecule. A parallel path is now emerging. Biology is becoming an engineering discipline. This is the dawn of Tech Bio, one of Vsquared’s core Generational Growth Themes (GGTs).

Tech Bio applies advanced technology, including computation, robotics, data science, and semiconductors, as the primary engine. Biology becomes the domain where these tools industrialize discovery, diagnostics, and treatment.

The Convergence: Where Bits Meet Biology

Tech Bio sits at the interface of the digital, physical, and biological worlds. Our investment thesis focuses on the convergence of computational innovation and wet lab capabilities, enabled by industrial-scale hardware, across four critical axes:

• Computation & AI: Platforms that leverage multi-omics, genomic, and clinical data to generate predictive insights. This moves research from trial-and-error to in silico simulation and precision targeting.
• Automation & robotics: High-throughput robotics replace manual labor, scale experimentation, increase reproducibility, and merge biology with manufacturing.
• Platform infrastructure: Innovations in materials, microfluidics, and bioengineering tools provide the physical substrate for next-generation life sciences.
• Data architecture: Digital rails enable healthcare systems to collaborate securely. Here the data dividend takes a biological form: value comes from longitudinal data that preserves individual heterogeneity rather than averaging it away, and privacy-preserving technologies and federated learning unlock that value without compromising security.

The European Edge: Privacy as a Competitive Advantage

Europe’s regulatory landscape encourages robust, interoperable, and privacy-first systems. MDR and similar standards established evaluation frameworks the field now needs worldwide. Companies like Hedera Dx are building infrastructure that enables liquid biopsy and real-world clinical data integration at scale. Federated and decentralized models create competitive moats versus centralized approaches.

From Prototype to Industrial Scale

At Vsquared, we pair Frontier Taste with Industrial Judgement:

• Frontier Taste: We focus on technological breakthroughs with measurable impact. Companies like Atrandi Biosciences, with next-gen microfluidics, demonstrate step-changes in capability at the single-cell level.
• Industrial Judgement: We support scaling complex science into industrial systems. Tech Bio companies need expertise and resources to grow from proof of concept to broad application.

We back founders building platforms that bring products to market and scale biology as an industrial discipline.

The Future is Engineered

The next global leaders in Tech Bio will be defined by platforms that make thousands of discoveries possible. They will treat biology as a data problem, a manufacturing challenge, and an engineering discipline.

We are backing the architects of the tech bio revolution.

Build the future of Tech Bio with Vsquared.