100% deeptech. 0% debt. We often invest equity in deeptech companies without external debt. Enough people have asked why, so we’ll spell it out.
DeepTech can build category leaders and sometimes generate the kind of returns investors dream about, but it also comes with long development cycles. There are real technical risks and commercialization timelines that can sometimes make a mockery of what was in our spreadsheet. And that doesn’t sit well next to a fixed repayment schedule.
Take ASML. It’s Europe’s most valuable technology company, valued at around €600 billion, though it holds more cash than debt… It funds its own growth without using leverage to do it. Being the only company on earth (for now!) that can build EUV machines obviously helps, but balance-sheet discipline is a big part of why it could keep investing through downturns while others pulled back. Northvolt is the counter-example. On paper, it was Europe’s great battery hope, and it borrowed heavily to build gigafactories at speed. When production failed to ramp as planned and key customer commitments disappeared, there was no slack left. It filed for Chapter 11 a year after raising billions in debt financing and later went bankrupt.
The lesson we keep landing on is that in DeepTech, a strong balance sheet usually beats maximum leverage. It’s less thrilling on a pitch deck and a lot more useful at 2 a.m. when a key customer in your venture cancels.
We run our own shop the same way. Our DeepTech ventures, across Europe and the US, are financed with equity, topped up with grants where available and, for the more mature companies, real operating cash flow. External debt initially plays no part, soft-loans are only introduced combined with long-term income streams. That’s why we supported our portfolio company Perpetual Next with a 95% reduction of its debt, bringing its development portfolio to a debt-free position as it prepares to scale up their biomethanol blueprint globally. And we are also reducing our own overall debt ratio as we re-allocate more capital into deeptech, and we’ll keep doing so.
