Dear Vanagon Community,

As the year comes to an end, it’s clear how strongly 2025 has shifted the momentum in our favour - both at the macro level, with Europe rediscovering its strengths (read below the summary of a recent McKinsey study), and within our own portfolio: We have now completed 20 investments, closed 6 uprounds, with more expected before year-end. Our startups continue to scale their client base and grow new ARR, while positioning themselves as thought leaders and winning renowned awards. Market momentum is further reinforcing portfolio performance, and over the next 18 months we intend to build on this tailwind by adding another 10-15 top-tier companies to the portfolio - doubling down on Europe’s most ambitious DeepTech founders.

And as the year closes, so does the opportunity to join Vanagon: the Final Closing of Vanagon Ventures Fund I is now less than three weeks away. As of now we have built one of the most multifaceted LP communities in the market — from hidden-champion Mittelstand firms and family offices to former founders, including multiple unicorn and “triple-unicorn” builders from Munich. We’re also backed by Allocator One, a Fund of Funds investing in the global top 3% of emerging managers.

This is the opportunity we continue to focus on:

A recent McKinsey study found the following: Europe is entering its most significant structural shift in decades: Since the continent missed the tech wave of the 90s and 2000s and now needs to catch up, DeepTech is becoming the new economic engine. By 2030, the ecosystem has the potential to create over $1 trillion in additional enterprise value and up to one million new jobs, fueled by world-class research, strong industrial foundations, and a rising generation of technical founders. Already in 2024, one-third of all European VC investment flowed into DeepTech, and the share of European DeepTech unicorns has doubled since 2021.

For investors, the signal is clear: DeepTech startups in Europe reach unicorn status 28 months faster than traditional software companies and show higher money-over-money returns. Strong IP defensibility, tangible industrial demand, and global market pull create exactly the kind of asymmetric upside that defines today’s technology cycle.

Several European markets are emerging as powerful proof points. Sweden channels 65% of its startup capital into DeepTech and allocates 1.6% of its GDP to DeepTech debt funding. France has grown from 7 to 42 unicorns in under a decade. The UK deploys 0.4% of GDP into late-stage DeepTech, nearly matching US levels. Meanwhile, 57% of European LPs are actively diligencing DeepTech-focused funds — an unmistakable sign of accelerating momentum.

Furthermore, Munich has emerged as Europe’s DeepTech capital due to its unique ecosystem. Its attractiveness in the DeepTech space landed Munich even a place in the top 5 worldwide in overall startup density (along with the Bay Area, Boston, NYC, & Cambridge).

Europe stands at an inflection point - technologically, economically, and geopolitically. And right now is the moment to back the next generation of category-defining DeepTech companies.

Source: McKinsey & Company, Europe’s deep-tech engine could spur $1 trillion in economic growth Report, October 29, 2025

This year alone, more than 2,000 innovators entered the Innovation Radar Prize selection awarded by the European Commission and Dealflow. The Innovation Radar Prize celebrates the most promising EU-funded innovations with the potential to make a global impact. ExoMatter, following in the footsteps of early-stage BioNTech, Skype and ARM, entered in the Climate, Energy & Mobility category - and ended up winning the entire competition across all categories.

The impact: faster discovery of sustainable materials and a meaningful acceleration towards a circular, climate-conscious industrial future. As an investor since pre-seed, we are incredibly proud to see a Munich team set such a strong signal for what European DeepTech can achieve. This is the kind of ambition, excellence, and purpose-driven innovation we love to back.

We’re not here to build just a portfolio; we’re here to build a legacy. That’s why we are continuously leveraging expertise that strengthens our advantages and drives outperformance. With Christian Schad joining Vanagon as a Strategic Advisor, he brings his full-cycle experience and exceptional track record as co-founder of Planet A (€160M fund), one of Europe’s most active VCs. Christian advises us on various topics such as governance, compliance, and reporting processes across all entities.

Welcome on board, Christian - we’re proud to have you with us 🙌🏼

Thanks to our founders, our investor community, an investment thesis that reflects the most relevant market shifts, and a good dose of hard work (and our stubborn persistence), we have been able to deliver a strong debut performance, now closing in on our target volume of €20M.

Right now we are in the last stretch before our Final Closing mid December. We have managed to bring together one of the most vibrant and enriching LP communities in the market - from hidden-champion German Mittelstand companies and family offices to exited entrepreneurs, BigTech veterans, and unicorn founders from the Munich ecosystem. We’re also proud to be backed by a leading Fund of Funds that invests in the top 3% of emerging managers globally.

If you’d like to learn more about Vanagon and our investment approach, we’re happy to share further details with prospective LPs.

Best wishes from Munich,

Susanne, Sandro and Axel