The guy who built Unity into a tool that powers half the world's video games has a new job. He's writing checks. Transition Ventures, the early-stage firm co-founded by David Helgason, founder and former CEO of Unity, has closed a 128 million euro Fund II, about 150 million dollars, pushing its total assets under management past 257 million euros.

The fund targets early-stage companies building at the intersection of AI and the physical world. Software, hardware, deep tech. The unglamorous, capital-hungry stuff that turns code into things that move, sense, and act in the real world.

It's a London-based firm, technically. But the DNA is unmistakably Nordic, and the thesis says a lot about where serious money thinks the next decade of value gets created.

Helgason's resume gives this fund its credibility, and you can't separate the two.

He co-founded Unity in 2004 and grew it into the engine behind a staggering share of mobile and indie games, eventually taking it public. That's not a guy who read about building companies. He built one of the most widely deployed pieces of creative software on the planet, navigated the brutal transition from scrappy startup to public company, and lived every operational nightmare along the way.

Founders notice that. When a former operator of Helgason's caliber offers to back you, the pitch isn't just capital. It's pattern recognition earned the hard way, from someone who's actually sat in the chair you're sitting in.

The firm leans into this. Helgason has been blunt about his frustration with conventional venture. He's argued that the classic VC model of backing more of the same, incremental improvements, has run out of road. His pitch to founders is that they shouldn't have to choose between a fund with the muscle to help them scale and one that's actually aligned with their values.

Whether that's genuine conviction or fundraising poetry, you can decide. But the man has the track record to say it with a straight face, and LPs clearly bought it.

The thesis is the interesting part, and it's a deliberate contrarian bet.

Most AI capital over the last few years chased software. Chatbots, copilots, agents, the whole digital layer. Transition is pointing somewhere harder: the messy frontier where AI meets physical reality. Robotics. Industrial systems. Hardware that has to work in a factory, a field, or a supply chain, not just in a browser tab.

That's a tougher place to invest. Hardware breaks. Manufacturing is unforgiving. Deep-tech timelines stretch past the patience of most funds. But it's also where a lot of the durable value is hiding, because physical-world problems are harder to copy and the moats run deeper. You can clone a SaaS product in a quarter. You can't clone a robotics company's years of field-tested engineering.

Transition says its team has personally founded companies worth more than 12 billion euros across software, hardware, and deep tech. That's the operator-led model in a nutshell. Partners who've built at scale, backing founders trying to do the same in domains where building is genuinely hard.

Zoom out and Transition's close isn't an isolated event. It's part of a 2026 wave of specialist European funds raising for exactly these themes: deep tech, AI, climate, energy, industrial systems, research-led company formation.

In the UK alone, 2026 has seen fund announcements from 2150, Lansdowne Partners, Eka Ventures, and Passion Capital, all clustered around climate, AI, sustainability, or research commercialization. Outside the UK, the activity spans Denmark's Footprint Firm with a climate and deep-tech vehicle, Montis VC's AI-driven energy and industrial-tech fund in Poland, 360 Capital's deep-tech transfer fund in France, and Vanagon Ventures' pre-seed deep-tech and AI fund in Germany.

Tally the adjacent vehicles and you're looking at more than a billion euros disclosed across similar fund strategies this year. That's not noise. That's a structural reallocation of European venture toward hard tech, and away from the consumer-app froth that dominated the last cycle.

Here's the practical read for anyone building in the Nordics or wider Europe.

A new fund closing means fresh dry powder hunting for deals, and a 128 million euro early-stage vehicle from a credible operator is a meaningful new buyer in the market. If you're building something at the AI-meets-physical-world intersection, the pool of people who understand your business and have money to deploy just got a little deeper.

The specificity matters too. Generalist funds spray and pray. Thesis-driven funds like Transition bring focus, relevant networks, and partners who actually get the technical and go-to-market realities of hardware and deep tech. For the right founder, that's worth more than a marginally higher valuation from a tourist investor who'll panic the first time a manufacturing milestone slips.

And the broader signal should encourage anyone building hard things in Europe. The capital is rotating toward you. After years of watching the splashiest checks go to software, the funds raising in 2026 are increasingly built for founders solving physical, industrial, and climate problems. The money is finally matching the ambition.

Helgason could have retired into the comfortable life of an angel investor and conference speaker. Instead he built a firm, raised a second fund, and put a thesis on the table that runs against the grain of where most AI money has flowed.

128 million euros is not the biggest fund in Europe. It's not trying to be. It's a focused, operator-led bet that the next generation of valuable companies will be built where bits meet atoms, and that the founders attempting it deserve backers who've actually built something.

Coming from the person who handed millions of developers the tools to build their own worlds, that's a bet worth taking seriously.

Source: EU-Startups.