Advanced materials & manufacturing
Inside the factory of the future
Last updated: 4 May 2023
Market 101
Advanced materials — a catch-all term for the intersection of chemistry, physics, nanotech, ceramics, metallurgy and biomaterials — promise to bring big improvements to existing products. In Europe, they’re impacting almost every corner of the manufacturing economy — and helping the continent hit net zero too.
An aeroplane or a car, for example, that’s made from stronger and lighter materials will last longer and run more efficiently. 3D-printing specialists say their manufacturing method can build houses faster and cheaper than traditional construction. Meanwhile, a new breed of startups are making greener alternatives to glass, steel, leather and plastic. This expanding world of high-tech manufacturing has bags of promise but the big unknowns, as ever, include whether novel materials can be produced in workable formats and sufficient amounts at an economical price.
Europe’s centuries-old manufacturing base is widening, but not every factory is thriving. The cost of energy has pushed some manufacturers to the brink. Then you have the US’s giant package of subsidies and tax rebates for green industry and chipmakers, tempting businesses to relocate across the Atlantic. European politicians have every reason to fear tech poaching, as big European chip companies like Arm and Paragraf choose to grow their companies stateside.
A rocky few years — the pandemic, war and supply chain breakdowns — have persuaded many policymakers to re-examine the importance of accessing critical raw materials. Countries around the world are investing billions in their domestic semiconductor industries, for instance. If Europe wants to host the factories of the future, it’ll have to move quickly.
Early stage market map
Key facts
£110m/gr
the price of the most expensive advanced material to date1
28.5m
people employed in manufacturing in Europe2
70%
of all technical innovations are directly or indirectly attributed to advanced materials3
Trends to watch
1. Splitting the atom (and the bill)
While promising, some advanced materials have exorbitant production and distribution prices, depending on quality and use cases. The costs of compounds like graphene can turn startups into high-capex companies struggling to return the investment.
Supermaterials will need to become cost-competitive and leverage their relative efficiency to reach economies of scale. Concessional loans, grants and flexible VC funding terms can boost their growth timelines.
2. Enabling the enablers
Advanced materials are core elements supporting the competitiveness of European deeptech. Nanomaterials for superconducting quantum bits, or qubits, additive manufacturing for aerial vehicles, complex alloys for energy infrastructure. The list goes on.
European sectors that would greatly benefit from novel materials include quantum computing and spacetech, which incidentally are among 2023’s hottest verticals, as well as healthtech.
3. The three Rs, but make it advanced
Waste solutions are everything but new, and have captured the greatest share of European funding for the materials sector in recent years. But only a handful of startups have succeeded in bringing them to market so far.
VCs have been keen on startups developing biodegradable packaging, alternative polymers, waste upcycling solutions, industrial manufacturing improvements, sustainable dyes and textile fibres over the past two years.
4. Building smarter cities
Other than being heavily regulated, construction is also a notoriously polluting industry, partly due to unsustainable byproducts from the manufacturing of traditional materials.
Carbon-free cement and steel startups are arguably the most established in the space and will likely dominate the upper share of funding over the coming years.
Startups tracked by Sifted
Sifted take
Advanced materials, which take ages to be put to good commercial use, are the ultimate test of investor patience. They’re also a big test of political foresight — and a key challenge for Europe right now is the advanced state of US industrial policy. We’ve already noted the moves by chip startups such as Arm and Paragraf. Big European climate tech companies also seem keen to access US green subsidies and rebates. If Europe wants factories of the future, its policymakers need to respond fast.
Rising stars
Develops bio-based membranes made from cellulose. Backed by LIU Invest, Almi Invest, Voima Ventures, Klimatet Invest, and KTH Holding
Round
Pre-seed
Valuation
Undisclosed
Date
2022
Size
€1,300,000
A nanotech startup, it’s achieved high-performance sodium-ion batteries through a novel CO2-derived electrode material, which reduces carbon emissions.
Round
Pre-seed
Valuation
Undisclosed
Date
2022
Size
€500,000
Backed by better ventures, it produces biocarbon-based concrete additives to minimise embodied CO2., for energy efficient construction.
Round
Pre-seed
Valuation
Undisclosed
Date
2022
Size
€1,800,000
It develops sustainable solutions for industrial processes by converting waste into valuable resources, including cement, steel, and waste incineration.
Round
Seed
Valuation
Undisclosed
Date
2021
Size
Undisclosed
Early stage startups to watch
Anaphite Limited
€6.8m
€4.5m
€16.5m
Cambrium
€6m
€3m
-
Carbon Waters
€2.3m
€720k
€5.3m
Cellfion AB
€1.3m
€1.3m
-
CemVision
€90k
€2.3m
-
ecoLocked
€1.8m
€1.8m
-
Fairbrics
€23.5m
€16.7m
-
FenX
€170k
-
-
Fishy Filaments
€600k
€270k
-
Foviatech GmbH
€1.2m
€1m
-
GROWN bio
-
-
-
Lignovations
€1.1m
€500k
-
MAGNOTHERM Solutions GmbH
€9.4m
€6.3m
-
MIMSI Materials AB
€1.4m
€780k
-
NEFFA | New Fashion Factory
€1.3m
€645k
-
OCEANIUM
€9.7m
€3.2m
-
QuantumDiamonds GmbH
€500k
€500k
-
Shellworks
€7.3m
€6m
-
Thermulon
€1.5m
€1.1m
-
UP Catalyst
€500k
€500k
-
ValCUN
€1.5m
€1.5m
-
Europe’s success stories
Who early stage startups are up against
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
This Finnish circular company has figured out a way to turn wood pulp into fibres, without adding any nasty chemicals.
The company has raised over $20m since 2018, according to Crunchbase data, and has developed a hoodie with sportswear maker Adidas.
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
UK chip startup Paragraf closed a $60m Series B round in 2022 led by US-based New Science Ventures, which valued the business at about $200m. The company bought Cardea Bio — a California-based competitor — in April 2023 to grow its business in the US.
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
Opened the first industrial-scale “textile-to-textile” recycling plant in the world in 2022, where old jeans and t-shirts are being turned into materials for new clothing.
The company listed in Stockholm in 2020.
Sources
News articles
1 University of Oxford | This powder is the most expensive thing on earth
Financial Times | January 2022 | Graphene start-up wins backing from UK Treasury and CIA-linked firm
Sifted | November 2021 | Inside Spinnova’s future textiles factory, where trees are turned into clothing
Sifted | August 2022 | What does America’s $369bn climate bill mean for Europe?
European Parliament | February 2023 | Chips Act – the EU’s plan to overcome semiconductor shortage
UK Government | November 2022 | New Business Secretary announces £95 million funding for super-materials of the future to boost UK growth
Research reports
2 European Commission | 2021 | Advanced manufacturing
3 Materials 2030 Manifesto | February 2022 | Systemic Approach of Advanced Materials for Prosperity – A 2030 Perspective
European Commission | Advanced materials and chemicals
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