A billion-euro bet on Europe’s most uncertain frontiers: climate, deep tech, and industrial transformation. Can government-backed funds catalyze global champions—or do they risk crowding out private capital?
Dr. Elisabeth Schrey leads the Deep Tech & Climate Fonds (DTCF), a €1B investment vehicle co-financed by Germany’s Future Fund and ERP Special Fund. From Munich to Berlin to Brussels, she’s navigating the hardest question in European venture: how to deploy government capital without distorting markets.
Together, we explore how DTCF is shaping Europe’s growth-stage landscape, what it takes to invest in policy-fragile verticals like hydrogen and climate tech, and why Europe’s future industrial champions may depend on funds like this.
Here’s what’s covered:
01:47 Why Elisabeth Took the Helm at DTCF (and What Gap It Fills)
03:32 The Co-Investment Model: Benefits, Limits, and Founder Experience
05:38 Crowding Out or Catalyzing? Steelmanning the Public Capital Debate
07:21 When DTCF Steps Aside—and When It Competes for Deals
09:54 Walking the Tightrope: Returns, Ecosystem Support, and Incentives
14:36 Thinking Ahead: Could DTCF’s Next Fund Be Purely Financial?
15:42 The Scale Up Europe Fund vs. DTCF: Complement or Competition?
17:18 Investing in Policy-Fragile Sectors Without Betting on Subsidies
20:38 Defining “Readiness to Scale” in Uncertain Markets
22:28 Avoiding the Subsidy Trap: Building Models That Work Without Support
25:03 Climate & Hydrogen: Placing Bets Before the Hype
27:36 Tech Waiting for the Market vs. Market Waiting for Tech
29:06 Expanding the Portfolio: Semiconductors, Robotics, Cybersecurity
31:27 Munich vs. Berlin: Why Munich Has Emerged as a Hardware Hub
32:53 Corporates in Venture: Buffer, Booster, or Bottleneck?
34:38 What Founders Need: Senior Hires & Serious Cashflow Models
36:04 What Investors Get: Policy Links, Due Diligence, Deep Tech Edge
38:22 Advice for Emerging VCs & Policymakers: Where the Next Gap Lies
📺 Watch the episode here or stream it on Spotify or Apple Podcasts—now with chapters for easy navigation 🎧
✍️ Show Notes
From Seed to Scale: Why DTCF Exists
Europe’s deep tech founders struggle to put together €20M–€70M growth rounds. Elisabeth shares why she left seed investing to run DTCF—and how the fund has already deployed capital into 17 startups across Germany and Europe.
Co-Investment as Discipline, Not Weakness
By design, DTCF can’t lead rounds. Elisabeth explains how this forces syndicate-building, spreads risk, and helps corporates and family offices play bigger roles—while acknowledging the trade-off: founders sometimes want a faster yes.
Crowding Out vs. Catalyzing
The oldest critique of public money in venture. Elisabeth walks both sides of the argument—and shows how DTCF deliberately focuses on capex-heavy, long-cycle, hardware-intensive companies where private capital is scarce.
Policy Fragility & The Subsidy Trap
Hydrogen, recycling, and sustainable fuels: many climate verticals depend on regulation. Elisabeth outlines how DTCF stress-tests business models—favoring companies that can win even if subsidies disappear.
Europe’s New Tech Sovereignty
From semiconductors to New Space, Elisabeth argues that Europe must scale independent champions. That means betting early on still-risky tech, and sometimes waiting years for markets to form.
Munich Rising, Berlin Evolving
Munich’s industrial base, ecosystem maturity, and universities have given it an edge in hardware and production tech. Berlin, meanwhile, continues to shine for software but is now seeing deep tech founders as well.
Advice for Founders & Investors
Founders: hire senior sector specialists early, and don’t skimp on cashflow models.
Investors: expect DTCF to bring deep tech diligence, policy access, and process management—not just capital.
Looking Ahead
With five years left in its investment period, DTCF is hiring, expanding, and preparing for a future where private mega-funds may fill the current gap. Elisabeth’s bet: the next big opportunity lies at the intersection of late VC, early infra, and private equity.
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