Europe's startup momentum is reflected in the numbers: Between challenges and promising signals

At first glance, Europe’s startup scene appears more vibrant than ever – but the available market data only partially supports this perception. The actual situation is more nuanced: the European venture capital market has not yet fully recovered from the global correction of 2022 and 2023, but shows early signs of a trend reversal.

Investments stagnate, fundraising collapses

According to PitchBook, a total of €43.7 billion was invested in European startups by Q3 2025 – spread across 7,743 transactions. The forecast for the full year indicates that the total investment will not surpass the €62.1 billion of 2024. This suggests that investments are more of a sideways trend than an upward one.

The situation is even more critical in VC fundraising. European venture capital firms raised just €8.3 billion in the same period – a figure indicating the weakest annual fundraising result in the last decade. This stands in stark contrast to the US, where venture deals had already exceeded the annual volumes of 2022, 2023, and 2024 by the end of Q3 2025.

Analysts estimate that the declines in fundraising of about 50 to 60 percent are significant. A large part of this decline is being offset by emerging managers, not by established mega-funds that raised massive capital last year.

Americans return – with new priorities

A key turning point, however, is the increased participation of American investors. In 2023, the US share of European venture deals reached a low of 19 percent. Since then, this figure has been steadily rising. US-based VCs are apparently rediscovering Europe.

The reason lies in valuation calculations: while in the US, entry prices for AI technologies are hardly attainable due to high multipliers, Europe offers significantly better entry opportunities for international investors interested in similar technologies with more moderate valuations.

European AI talents attract global capital

Concrete success stories vividly illustrate this trend. The French AI research lab Mistral closed a Series-C round of €1.7 billion in September – with prominent participation from Andreessen Horowitz, Nvidia, and Lightspeed. This shows: European tech talent with global ambitions is also attracting global investors.

Similarly, the Swedish Vibe-Coding startup Lovable recently announced a Series-B funding of $330 million. This round was led by US venture capitalists such as Salesforce Ventures, CapitalG, and Menlo Ventures – a clear sign that European innovations in AI are gaining worldwide investor attention.

The Klarna exit as a catalyst

The IPO of Swedish fintech company Klarna in September marks a symbolic turning point. After two decades of capital raising in the private market (6.2 billion US dollars), the exit was achieved – a success story that restored confidence among European LPs in a changing environment.

These visible success stories also influence the mentality of European founders. Entrepreneurs are increasingly looking up to global role models like Spotify, Klarna, and Revolut. They no longer start with the goal of dominating regionally, but with the clear intention to scale globally – a fundamental shift in ambition levels not previously observed to this extent.

Massive VC investments for the coming decade

This positive outlook is shared by established investors as well. Swedish EQT, for example, has invested $120 billion in European startups over the past five years. The company plans to invest $250 billion over the next five years – a strong signal of long-term commitment and confidence in the European startup landscape.