An exposition around the European startup market at the annual Slush conference in Helsinki last month highlighted the gap between participants’ enthusiasm and real data on investments. Despite optimism, data display that the European market has not yet recovered after the reconsider of global VC funding in 2022–2023, but signs of a turn are emerging: notably Klarna’s IPO and growing interest from local investors in AI startups.
According to PitchBook data for 2025, European investors invested €43.7 billion in 7,743 deals by the conclude of the third quarter. Projections suggest the annual total could reach around €62.1 billion – as in 2024 and 2023 – but will most likely not exceed them.
Compared with the United States, deal activity in 2025 had already, by the conclude of the third quarter, reached the levels seen in 2022–2024, PitchBook reports.
The problem isn’t just in the volumes: by the conclude of Q3 2025 European venture firms had raised a total of €8.3 billion ($9.7 billion), which could indicate the lowest annual fundraising figure in the last decade.
“Fundraising – from LPs to GPs – undeniably, is the weakest area in Europe,”
“They seem quite optimistic about the European market,”
Positive signals and new success stories
After a lull in activity, American investors’ participation in European startup deals is picking up again. Rajan notes that the US share rose after the 2023 peak: 19% of all European deals involved American venture funds that year, and since then the growth has continued.
Notably, European AI leaders are starting to attract attention: the Swedish Lovable, which specializes in vibe coding, drew significant investments from American venture funds, including Salesforce Ventures, CapitalG, and Menlo Ventures. Earlier the company announced a Series B round of $330 million, in which many American investors also participated.
Also the French AI lab Mistral managed to raise €1.7 billion in a Series C round in September, with participation from Andreessen Horowitz, Nvidia and Lightspeed, reflecting growing interest in European startups from global players.
Another key event was Klarna’s public market debut in September after raising $6.2 billion in the past two decades on the private market. The exit evidently redirected capital toward European LPs or boosted confidence in future market exits.
“Ambitious founders have seen what success views like in companies like Spotify, Klarna, Revolut, and now are building companies with the same ambitious mindset,”
According to Englsson, these stories are shaping a new approach among founders in Europe – they aspire to global success, not be limited by regional boundaries. This inspires EQT and other players to take bolder steps.
“Regarding EQT, in the last five years we have invested $120 billion in Europe,”
“We will invest another $250 billion in Europe over the next five years,”
Bottom line: despite current challenges in financing and transparency, the data point to a slow but steady turn in Europe’s startup segment. The progress from American investors, growing interest in European tech, and the successes of European players on the global stage lay the groundwork for further recovery in the coming years.
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