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You know what might become Europe’s next industrial battleground? Materials. Or more precise: Circular materials.
What used to sit in the sustainability corner — greener packaging, better coatings, less plastic — is now moving into the core of Europe’s strategy. With the EU preparing a Circular Economy Act for 2026 and tightening the rules around secondary raw materials and plastic waste, the message is clear: the next competitive edge will come from the materials we build on.
The interesting companies are not selling “greener versions” of old products. They are changing the inputs entirely — from fossil carbon to biomass, proteins, microbes, waste streams and captured CO₂. That is where the real leverage sits: not in polishing the linear economy, but in replacing the logic underneath it.
This week’s Top 5 looks at the European startups pushing sustainable materials past the pilot stage and into real value chains.
In this week’s The Leap, DTM co-founder and CEO Martin Schilling takes a closer look at Germany’s planned “Kapitalrente” (or capital-backed pension)- and how tech could prosper from it. Germany does not lack capital; it lacks the institutional plumbing to turn national savings into national technological upside. The Kapitalrente could become that bridge — but only if it is designed with professional fund allocation, real diversification and the courage to back Europe’s own deep-tech growth story.
Also in this issue:
The World Economic Forum’s Top 10 Emerging Technologies of 2026 report shows how scientific breakthroughs are moving closer to real-world deployment across energy, materials, food systems, healthcare, AI and data security.
DTM will fly you to South Africa all expenses paid if you help us fill some key positions.
Enjoy the read!
THE LEAP
Fund the Founders, Fund the Pensioners
Dear all,
Picture this: a 33-year-old Social Democrat who came up through the party's youth wing, a 30-year-old conservative they call the Rentenrebell, fresh off leading the revolt against his own coalition's pension package, and a 74-year-old who ran Germany's federal labour agency for thirteen years. Add eight professors. Lock them in a room for 167 days and tell them to fix the German pension system.
That is the Alterssicherungskommission (or Retirement Security Commission), which Chancellor Friedrich Merz and Labour Minister Bärbel Bas convened in December 2025 and which delivered 33 recommendations two weeks ago — all of which the government says it will implement.
I had the pleasure of talking to one of the commission members over the weekend. The idea he was most animated about was recommendation 28: a “gesetzliche Kapitalrente”, a statutory, capital-funded pension on the Swedish model. Two percent of gross wages, split employer/employee, into individual accounts, pooled and — invested in the capital market.
Why Sweden? Because we can see what a quarter-century of that policy does. Sweden's default premium-pension fund, AP7, has grown its savers' capital by more than 700% since 2000:
Nearly six million Swedes sit in this fund. But where the money goes decides whether Germany's version is a footnote or a turning point. A Kapitalrente (or capital-backed pension) with a real allocation to European venture and growth — deployed through professional managers, not politicians — is the biggest lever we have to buy back a technological future we don't currently own.
The 2026 Deep Tech Report from Drumbeat Capital isn't subtle on this: the US accounts for 80% of all deep-tech funding and out-raises Europe by roughly 9x, a gap that widens from 2x at seed to 16x at Series C+, when a champion most needs to scale. Yet Europe's pension funds manage over €3 trillion and route just 0.12% to venture, against ~10% in private markets for US funds. German institutions alone could unlock €15 billion a year with a 2% shift. The capital exists — it's just pointed at US Treasuries, not our own founders.
Italy already pulled the lever
While we convened a commission, Italy rewrote the rules already. Its 2024 competition law tied a tax break to behaviour: pension funds keep their capital-gains exemption only if they steer at least 5% of qualified investments into venture funds — a floor that rose to 10% this year, European funds included. Italian VC raised close to €1.5 billion last year, up 32%, and Enpam, the €30 billion doctors' fund, calls the exemption a “systemic catalyst.” In Q1 2026, as dealmaking cooled across the rest of Europe, Italy bucked the trend with 225 rounds — up 80% year-on-year — powered by the institutional money the mandate unlocked. You don't order pension funds into venture — you make the safe choice and the innovation choice the same choice.
Canadians and Americans already own our winners
Redstone mapped German startups' cap tables: of the ~€47 billion held by German unicorns, about €4.7 billion sits with US pension funds — against roughly €94 million for German ones. Canada's “Maple 8” funds, meanwhile, compound near 8.3% a year, double the European average, and are now hunting in Europe too. North American retirees will own the upside of European technology; the savers next door are shut out.
How not to do it: the tale in Berlin
This is not an argument for pension funds buying startups directly. We ran that experiment. The pension fund for Berlin's dentists, the VZB, put more than 70% of its ~€2.2 billion into illiquid bets, deal by deal: direct startup stakes, luxury resorts on Ibiza, a shrimp farm in Glückstadt (bankrupt), an insurtech it eventually owned outright (insolvent). The loss: an estimated €1.1 billion, about half the fund. Prosecutors are investigating more than twenty people for corruption; the former chairman allegedly bought private apartments in the very resort the fund backed. Retirees face cuts of up to 70%.
The lesson isn't that technology is dangerous. It's that amateurs investing directly, without diversification or independence, destroys capital. The answer is the opposite: Germany and Europe have a deep bench of professional venture and growth managers — the same ones American and Canadian retirees already trust. Growth funds deliver smaller, faster returns; early-stage funds higher, slower ones. A serious allocation across both, via fund-of-funds, is how you get the Swedish upside without the shrimp farm.
With hope that the next Kapitalrente ends up in venture funds, not shrimp farms,
Martin
DEEP TECH OPEN | SUSTAINABLE & CIRCULAR MATERIALS
Europe’s Top 5 Circular Materials Startups | Series A & Early Scale-Up Phase ($25m-1bn)
Best in class: These European startups are turning sustainable materials from lab promise into industrial infrastructure
Traceless Materials | Hamburg, Germany
Technology: Bio-circular material platform using plant-based agricultural residues to produce natural polymer alternatives for conventional plastics and bioplastics.
Customers: Packaging, consumer goods, food service, retail, logistics and brand owners looking to replace fossil-based plastics in high-volume applications.
Use Cases: Flexible and rigid packaging, coatings, films, single-use items, adhesives and plastic-replacement applications with improved end-of-life characteristics.
Funding: Raised a €36.6m Series A in 2023 to scale its biomaterial technology and build first industrial production capacity.
Why it Matters: traceless is one of Europe’s strongest bio-based materials companies, addressing plastic pollution with a material designed for industrial scalability rather than niche substitution
→ Traceless is positioning bio-circular polymers as a credible replacement layer for Europe’s packaging and single-use plastics economy.
Again | Copenhagen, Denmark
Technology: CO₂-to-chemicals platform using gas fermentation and synthetic biology to convert industrial CO₂ emissions and hydrogen into acetate and acetic acid, which can serve as building blocks for chemicals, materials, fertilisers and food.
Customers: Chemical producers, industrial emitters, materials companies and downstream manufacturers seeking lower-carbon drop-in chemical inputs.
Use Cases: Acetic acid production, acetate-based intermediates, low-carbon chemical feedstocks, CO₂ utilisation and material value chains dependent on commodity chemicals.
Funding: Raised a $43m Series A in 2024, following earlier seed funding and grant support; the company also signed a long-term partnership with HELM for distribution and sales of its first 50,000 tonnes of acetic acid production.
Why it Matters: Again targets one of the hardest parts of industrial decarbonisation: replacing fossil-derived chemical feedstocks without asking existing value chains to fully redesign themselves.
→ Again was born out of research developed over 10 years at the Danish Technical University, Stanford and MIT.
Paebbl | Rotterdam, Netherlands
Technology: CO₂ mineralisation process that converts captured CO₂ into permanent carbon-storing mineral materials for construction, including supplementary cementitious materials for concrete.
Customers: Construction materials companies, concrete producers, real estate developers, infrastructure players and industrial partners in the built environment.
Use Cases: Low-carbon concrete, carbon-storing cement substitutes, industrial construction materials and permanent CO₂ storage in mineral form.
Funding: Raised a $25m Series A in 2024, with investors including Capnamic, Amazon’s Climate Pledge Fund and Holcim; in 2026, the startup was awarded €4 million grant to lead European consortium developing next-generation carbon-storing cement binders
Why it Matters: Paebbl sits at the intersection of carbon removal, mineralisation and construction — a market where even small material improvements can translate into large emissions impact.
→ Paebbl is making the built environment a potential carbon sink, not only a source of embodied emissions.
Shellworks | London, United Kingdom
Technology: Bio-based materials platform producing Vivomer, a biodegradable plastic alternative made through microbial fermentation and designed to run on existing plastic manufacturing equipment.
Customers: Beauty, wellness, consumer goods and packaging brands seeking plastic-free packaging with premium design and manufacturability.
Use Cases: Bottles, jars, caps, cosmetic packaging, wellness packaging and moulded components produced through processes such as injection moulding, blow moulding and extrusion.
Funding: Raised a $15m Series A in 2026 to scale production, expand manufacturing capacity and support global market partnerships.
Why it Matters: Shellworks is moving biomaterials beyond lab prototypes into brand-facing packaging categories where performance, aesthetics and supply-chain compatibility are decisive.
→ Shellworks is positioning Vivomer as a manufacturable, premium-grade alternative to fossil-based plastic packaging.
Xampla | Cambridge, United Kingdom
Technology: Plant-protein material platform developing so called “Morro” natural polymers that are plastic-free, biodegradable and home compostable, designed to replace some of the most persistent single-use plastic formats.
Customers: Packaging producers, food service companies, FMCG brands, retailers and industrial partners seeking plastic-free coatings, films and barrier materials.
Use Cases: Takeaway box linings, coffee cup coatings, sachets, soluble films, food-safe films and microplastic-replacement applications.
Funding: Raised $14m in Series A funding in 2025, led by Emerald Technology Ventures with participation from BGF, Matterwave Ventures and existing investors, to support the replacement of more than 10bn single-use plastic items over five years.
Why it Matters: Xampla combines deep scientific roots from the University of Cambridge with a clear commercial pathway into packaging formats under regulatory and consumer pressure.
→ Xampla is building plant-protein polymers into a scalable replacement system for single-use plastics and hard-to-recycle barrier materials.
THE PULSE
Frontier Technologies Become Strategic Infrastructure
The World Economic Forum’s Top 10 Emerging Technologies of 2026 maps a frontier where deep tech moves from isolated breakthroughs into the systems that matter most: energy, materials, food, health, AI and data security.
The next wave of emerging technologies is moving closer to infrastructure: power grids, materials, food systems, healthcare, industrial chemistry and data security.
The World Economic Forum’s Top 10 Emerging Technologies of 2026 report was published in June in collaboration with Frontiers. Now in its 14th edition, the report identifies scientific and technological advances approaching the point where they could move from research into real-world deployment. Technologies were selected for their novelty, development progress and potential impact, drawing on input from scientists, technologists and innovation leaders.
Here are the 10 Emerging Technologies:
Everything-to-grid energy
Buildings, vehicles, batteries and devices become active grid assets, storing and returning electricity when demand peaks. The shift could turn distributed energy infrastructure into a resilience layer for power systems.Direct lithium extraction
DLE uses engineered systems such as sorbents, membranes and solvents to extract lithium from brines in hours rather than months. It could reduce land and water intensity while diversifying battery-material supply chains beyond today’s concentrated production hubs.Passive radiative cooling materials
These materials reflect sunlight and emit heat through the atmospheric window, cooling surfaces without electricity. Applied as paints, films, coatings or building components, they could reduce cooling demand in buildings and infrastructure.PFAS destruction
New destruction methods target the carbon–fluorine bonds that make “forever chemicals” so persistent. The field is moving beyond removal from water toward verified destruction in municipal and industrial waste streams.Precision fermentation
Precision fermentation programs microbes to produce proteins, fats, enzymes and other molecules at industrial scale. The technology could shift parts of food, cosmetics, pharmaceuticals and chemicals production from land-intensive systems into controlled biomanufacturing infrastructure.Exosome drug delivery
Exosomes act as biological couriers, carrying therapeutic cargo across barriers that synthetic delivery systems often struggle to cross. Their promise lies in more targeted treatments for cancer, neurological disease and other complex conditions.Personalized mRNA cancer vaccines
These vaccines are designed around the mutations of an individual patient’s tumour, training the immune system to recognize and attack specific cancer cells. The technology is advancing through clinical trials, but cost, sequencing access and manufacturing capacity remain key constraints.Quantum simulation for drug discovery
Quantum simulation models molecular behaviour at a level of fidelity classical computing struggles to match. Its potential is to improve early prediction of how drug candidates fold, bind and interact, reducing failure rates in drug development.World models
World models are AI systems designed to understand and predict how physical environments behave. Their relevance is strongest in robotics, climate simulation and other fields where AI must reason about real-world dynamics rather than only recognize patterns.Lattice-based cryptography
Lattice-based cryptography is designed to protect data against both classical and future quantum attacks. With post-quantum standards now emerging, the challenge is migrating critical systems before quantum computers can decrypt data already being harvested today
DTM OPPORTUNITIES
Hermann Hauser Frontier Lab
Building upon the legacy of the IECT Summer School, the Hermann Hauser Frontier Lab welcomes ambitious deep-tech founders from various verticals, who are preparing for their (pre-)seed funding rounds within the next 6-12 months.
Dive into the fundamentals of venture building – including customer validation, storytelling, and attracting VC investments.
Mentoring and workshops from acclaimed entrepreneurs, investors, and industry experts.
Become part of a strong deep tech and investor community, surrounding Hermann Hauser and Onsight Ventures.
Dates: September 28th - October 2nd
Location: Graz, Austria
Application deadline: July 15th
Find more information and apply on our website.
EUVC Corporate Summit
DTM-founder Martin Schilling will be speaking at the EUVC Corporate Summit in London where Europe's corporate venture leaders are convening in London this September — CVC heads, corporate innovation teams, and the GPs who work with them. One curated day: industrial resilience & sovereignty, corporate AI adoption, venture clienting in practice, and the LP investing playbook. ~200 seats, invitation-only.
As part of the Deep Tech Momentum community, you're invited free of charge — reach out to [email protected] to claim your seat.
There's also a closed-door LP Investing Day & Dinner in London on September 9th, hosted with Isomer Capital — limited to 20 seats, invitation-only, for corporates actively exploring LP allocation into venture funds. If that's relevant to anyone in your network, have them reach out to [email protected] directly and we'll see if there's a fit.
Dates: September 9th & 10th
Location: London, UK
For any questions reach out to [email protected]
DTM JOBS
We'll Fly You to Cape Town
Deep Tech Momentum is hiring four senior operators. And if you know the right person for any of them — someone who ends up in the role for at least six months — we will fly you to Cape Town for New Year's Eve, all expenses paid*.
We are hiring:
To apply: email [email protected] with your CV or LinkedIn.
To refer: email the same address with the candidate's details, and use the subject line "CAPETOWN – Referral for [role]".
*T&Cs: referral must be a new candidate not already in our pipeline. Candidate must be successfully hired and remain employed for at least six months. Trip budget: €5,000.
Thank you for reading this far. Here are two ways to grow closer to the Deep Tech Now community:
Become a Guardian of European Deep Tech: Are you a senior leader seeking commercial partnerships with Europe’s leading Deep Tech startups and SMEs? Successful applicants join Deep Tech Momentum’s Guardian network, receiving complimentary VIP access to our flagship event in May. Apply here.
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— Isabelle and Martin
Co-Founders, DTM
