From research project to €1B-backed AI lab in 18 months: Prior Labs is Europe’s new deeptech benchmark — TFN

• SAP has completed its acquisition of Prior Labs, a startup from Freiburg. The deal was first announced in May 2026, and SAP plans to invest over €1 billion in the company during the next four years.
• Prior Labs was founded just 18 months ago and became a leader in tabular foundation models, a type of AI that analyses spreadsheets and databases rather than text.
• Before being acquired, Prior Labs had only raised €9 million, making this one of the quickest exits in European AI. SAP has not shared the purchase price, even after the deal closed.

Usually, European AI startups spend years proving their models before getting noticed outside academia. Prior Labs did things differently. They published a paper in Nature, started a company based on their research, and were acquired by SAP, all in just 18 months.

A research paper turned into a company, which was soon acquired

Prior Labs emerged in 2024, when Frank Hutter, a University of Freiburg professor and leading expert in automated machine learning, joined Noah Hollmann, a computer scientist with experience at Google and Boston Consulting Group, and Sauraj Gambhir, who has a background in venture capital and M&A.

Together, they created TabPFN, a foundation model that analyses tables and spreadsheets in a similar way to how large language models handle text. This field is now known as the field of tabular foundation models.

Tech Funding News first reported on Prior Labs in February 2024, when the company raised €9 million in pre-seed funding led by Balderton Capital and XTX Ventures. Atlantic Labs, Hector Foundation, and Galion.exe also invested, along with angel investors Robin Rombach, co-founder of Black Forest Labs, and Thomas Wolf, co-founder of Hugging Face. This was the only funding round Prior Labs had before SAP’s involvement.

SAP said it planned to buy Prior Labs on May 4, 2026, and confirmed the deal was complete on July 17, 2026. SAP will invest over €1 billion in the company through 2030. The actual purchase price has not been shared, apart from the four-year investment plan.

Why this deal sets a new standard

In the last 10 years, Europe has invested more in deep tech, but successful exits have lagged. Deep tech investment reached $20.3 billion in 2025, according to Dealroom. Still, Europe is behind the U.S. in big exits. Prior Labs sped up this process, going from university research to a single funding round and then a major acquisition by a European software company.

The company’s own framing leans into this. “Eighteen months ago, Prior Labs was a research project. Today, we’re beginning our next chapter as an AI lab with the resources to tackle problems we simply couldn’t before. Taking tabular foundation models to the next level requires better data environments, deployment surfaces, and long-term research investment, and SAP is uniquely positioned to provide all of these,” Hutter says.

SAP’s chief technology officer, Philipp Herzig, cast the deal as a bet on structured data over language models.

“Early on, SAP recognised that the greatest untapped opportunity in enterprise AI wasn’t large language models; it was AI built for the structured data that runs the world’s businesses. Prior Labs has defined the category of TFMs and has built the world’s strongest research team in this category, topping the public benchmarks since day one,” Herzig adds.

How acquisitions affect research speed in large companies

Prior Labs’ TabPFN series, published in Nature, has now reached 4 million downloads, up from over 3 million in May. The model has been used in studies ranging from pancreatic cancer diagnosis to wildfire prediction. Hitachi uses it to predict train failures, and TD has applied it to financial forecasting. The company is advised by Bernhard Schölkopf and Turing Award winner Yann LeCun.

Prior Labs is not alone in this area. Kumo.ai has created a competing model called KumoRFM, which they say does better than TabPFN on multi-table tasks, while TabPFN is ahead in single-table accuracy. Another startup, Fundamental, raised $255 million in Series A funding and offers a large tabular model but has not yet published peer-reviewed benchmarks.

Prior Labs says it will keep its brand, leadership, and research focus within SAP, and plans to keep publishing research and releasing models openly. Whether this commitment holds will show if the acquisition becomes a benchmark for European deep tech or a warning sign. SAP has also agreed to buy Dremio, another AI-focused company, during this time.

How much SAP lets Prior Labs maintain its research pace, rather than folding it into existing product cycles, will shape how other European founders view this deal.