Daphni closes €260m deep tech fund as partners debate defence investments

Paris-based venture capital firm Daphni has closed its Blue fund at €260m, which it plans to channel into startups emerging from Europe’s labs.

Pierre-Eric Leibovici, co-founder and managing partner, said the firm wanted to leverage Europe’s strengths in science and research to create companies with strong, defensible IP.

“Software has created huge amounts of value but we see the times are changing,” Leibovici told Impact Loop over the phone. “These tools are becoming more commoditised and accessible for everyone, whereas science-driven deep tech still has huge barriers to entry.”

Daphni will invest at the early stage, with tickets ranging from €500k-€10m, spanning life sciences, physics, chemistry, mathematics and AI-enabled hardware.

The French firm is also considering internally whether to invest in defence.

“It’s a real debate within the team…about what investments are out of bounds,” said Leibovici.

If Daphni did venture into defence it would still be within the acceptable boundaries of its Article 8+ fund designation. And it wouldn’t be alone, either – exposure to defence in Article 8 “sustainable” funds increased 60% last year alone, according to one study.

Speaking for himself – not the firm at large – Leibovici said he thinks there’s significant potential in dual-use companies with both military and civilian applications.

“We definitely won’t invest in lethal weapons though,” he says.

Defence debates aside, Daphni’s core thesis is that Europe’s scientific output remains chronically under-commercialised – and underfinanced – despite the continent’s strong research base.

Europe counts around 2.2m researchers, with nearly one million working in the public sector. France alone has roughly 330,000 researchers and ranks second in Europe for patent filings.

“The opportunity lies in financing the transition from research to entrepreneurship,” Leibovici says. “That gap remains one of Europe’s structural weaknesses.”

Recent investments from the Blue fund, which was first revealed in March last year, include Owlo, a non-invasive 3D microscopy spinout from Institut Langevin; Karavela, a brain-computing company originating from INRIA; and EverDye, which applies green chemistry to textile dyeing using patented processes compatible with existing equipment.

In December 2024, Daphni also launched a €100m fund targeting underrepresented founders.

"There are talented entrepreneurs who are still [overlooked] by the venture capital system, especially in France, for many different reasons," Anita de Voisins, venture partner at the firm, told Impact Loop at the time.