Pathfounders Newsletter: Keep your eyes peeled, as DeepTech and Defence go up the agenda...

Every startup is now an AI startup. Every pitch deck says “AI-native”. Every demo looks like magic. Every graph points up and to the right. Every founder can say they are stitching together frontier models.

Those were the thorny discussion issues behind “How investors are picking startups in the AI era”, an evening in London brought together by YourStory PR and Pathfounders, gathering founders, investors and enterprise leaders to ask how capital, customers and builders can separate genuine AI-native companies from the noise.

The discussion, moderated by Pathfounders Founder and Editor Mike Butcher, brought together Ozan Dagdeviren, founder of AI skills assessment startup Aisa.to; Agata Nowicka, Managing Partner at Visionaries and founder of Female Foundry; and Ekaterina Almasque, Founding Partner of BlankPage Capital.

Read the event report here

The week’s news suggest venture capital is moving towards companies that turn are applying AI to various forms of country and region-level infrastructure, such as quantum data centres, industrial control, semiconductor tooling, healthcare operations, and materials science.

This suggest that the next European tech cycle will be built in the previously unsexy area regulation, physics, and industrial process.

Or perhaps we could call it: MCGA: Make Cement Great Again. 

Indeed, UK-based Gigaton is doing just that, as it told Pathfounders this week. It raised a $26M round led by Plural to automate heavy industrial plants, implying that heavy industry will become even more of a 'sovereign' industry.

Aside from the news run-down below, Pathfounders has also picked up a couple of early signals that support these trends.

Next week you’ll see a new DeepTech fund come out of the gate, back by LPs interested in European resilience. And you should also keep your eyes on the defence space later in June, when we hear whispers that a large funding round will be powering a startup to go up against some of the biggest players in the sector. That’s all we can say for now…

That said, these are not new themes, and, as James Wise from Balderton pointed out this week, the UK’s new Sovereign AI fund is being inundated with applications for funding.

And it’s not all just about Trump making unkind remarks about NATO. 

The UK’s Chief of the Defence Staff, Sir Richard Knighton, told the BBC that "This is the most dangerous period that I have known.”

So the message to founders is: get building those Sovereign and Resilience startups.

There we were, thinking the big Phoenix Court reveal on Friday would be a damp squib because we’d already broken the news of their ‘big pivot’ three weeks ago. Instead, CEO and co-founder Saul Klein (and team) put on a sterling show with a fascinating panel about inclusive innovation, round-table debates, and even music and dance performances by young people attached to its non-profit foundation. See our social media for a selection of photos. Guys, you are making it very hard for Pathfounders to remain a crucible of hard-bitten, cynical tech journalism… sob.

Oh, and SXSW London was on, but not that much seemed to happen in terms of actual tech news. Finr for celeb-spotting though, if you are into that. We are not.

• Oxford Quantum Circuits raised £260m in Europe’s largest private quantum round: This was week’s clearest deeptech scale signal. OQC’s round was pitched as Europe’s largest private quantum raise.

• Factorial raised $150m Series D at a $2.5bn valuation: This was a major European SaaS scale-up round in a market where many software companies are still nursing valuation hangovers.

• Quobly raised €115m Series A to commercialise silicon quantum computing: This was a serious French quantum raise with industrial backers.

• Wordsmith landed $70m Series B to turbocharge legal work with AI: One of the strongest European vertical AI stories of the week. In-house legal teams are becoming a prime target for workflow automation.

• Apoha emerged from stealth with $36m to build Liquid State Intelligence: Apoha is trying to measure how molecules and materials behave in the real world and its platform could have implications for World AI Models.

• Airspeed raised $20m to build AI agents for revenue teams: GTM execution becames another battlefield for  agentic AI.

• Poindexter Labs raised £2m to improve training data for advanced AI: Frontier AI still runs on specialist data, not magic.

• Dublin-based tax technology company Fonoa closed a $110m Series C funding round and announced the acquisition of PwC’s Indirect Tax Edge platform. 

• Gigaton landed $26m to scale autonomous industrial control: AI for cement, steel, glass and chemicals plants. It’s helping to save on their huge energy bills. 

• Geordie AI raised $30m for its security and governance platform for AI agents 

• Contentful, the German-founded content management company, was acquired by US software giant Salesforce, the companies announced today. Financial details of the deal were not disclosed, but let’s note that Contentful closed a $175 million funding round in 2021, at a valuation of over $3 billion.

• Runway AI put $200M worth of investment into its new London HQ for Europe: Valued at $5.3B, the World Models AI startup plans to make London its European headquarters and invest $200M+ into the UK's AI ecosystem by 2028, joining Anthropic and OpenAI who have European HQs there.

• Fuse Energy, a British energy company, closed its Series B, with new investors 20VC and Collaborative Fund contributing an additional €25 million ($30 million): The company says they have been EBITDA-positive every month since December 2025, with ARR climbing 32% in Q1 alone to over €472 billion ($550 million). 

Quantum and frontier compute is finally look like a market

• OQC raised £260m in Europe’s largest private quantum round: Quantum computing gets a coming-of-age moment in the UK. JPMorgan Chase and AMD joined it to launch a Quantum-AI data centre.

• Quobly raised €115m Series A to commercialise silicon quantum computing: France’s silicon quantum bet got some serious capital.

• Flok Health lands $12.5m to grow its AI-operated healthcare platform: The Series A round was led by Albion VC, with participation from existing investors Eka VC and Form Ventures, as well as new investor Mercia Ventures. 

Politics, politics

• Labour MP sues Elon Musk’s AI company over fake sexualised images: The Grok/xAI dispute is becoming a test case for non-consensual synthetic media.

• Palantir should not have significant role in UK public data systems, MPs say: The US platform’s power inside the British state is getting challenged. And their UK MD keeps going on TV…

The silly news of the week: 

Martin Scarsese joined German AI lab Black Forest Labs as an “advisor” (guys, you mean you gave him some options in return for promoting the company, surely?!). He was then promptly accused of ‘throwing artists under bus’ with AI storyboards. He pushed back, saying the immediacy of communicating his vision to cast and crew is ‘creatively freeing’. Sure, Marty, sure… 

Energy-intensive industries like cement, glass, and steel-making are facing an energy crisis. But the software that controls their plants is ancient. AI startup Gigaton plans to catapult these laggard industries into the future, by building fully autonomous plants. CEO and co-founder Josh Vernon told Pathfounders' Editor Mike Butcher how they plan to do it.

Watch/Listen/Like/Subscribe/Share: YouTube, Spotify, LinkedIn 

Ex-DeepMind duo raise $20M to build AI agents for revenue teams
AI agents are replacing GTM software dashboards, basically.

Apoha emerges from stealth with $36M to teach AI how matter behaves
The company is targeting pharma first, but could apply its technology to food, materials and even embed it into Physical AI.

Gigaton raises $26M round led by Plural to automate heavy industrial plants
The round was led by Plural, with the raise implying that heavy industry will become even more of a 'sovereign' industry.

Runway AI puts $200M investment into London HQ for Europe, joining Anthropic and OpenAI
Valued at $5.3B, the World Models AI startup plans to make London its European headquarters and invest $200M+ into the UK's AI ecosystem by 2028 end

Revolut, Mistral, Wayve and hundreds of startup founders launch campaign celebrating European tech VC fund
Balderton is kicking off ‘Built In Europe’ with a major advertising campaign across five European cities

• Send us pitches, column ideas, etc. via [email protected] 
• Subscribe to Pathfounders on YouTube, Spotify, Apple iTunes
• Check out our new selection of tech startup and investment events.
• Get Pathfounders news via WhatsApp (main WA feed) or via the Public channel.
• To partner with Pathfounders, email us on [email protected]
• Take our short, three-question reader survey here.

That’s all, folks

Follow Pathfounders:

Pathfounders WhatsApp Announcements (appears in your main WA feed)
Pathfounders WhatsApp Public channel

We are not on Substack, but we publish headlines from here.

Also: LinkedIn, X (Formerly Twitter), BlueSky, Telegram, Facebook, Instagram, Luma (events), RSS Feed for all posts, Podcast: Spotify , YouTube, TikTok, and Contact Pathfounders Anonymously