After three years of decline, European venture capital is launchning a return to growth. However, the recovery remains uneven across countries, with some major economies lagging behind despite an overall rebound in activity.
Investments are expected to reach approximately €66 billion in 2025, representing a 6.5% increase compared to the previous year. This rise, however, mquestions a more selective reality. The total number of deals continues to decline for the fourth consecutive year. Late-stage funding rounds now dominate the market, accounting for nearly two-thirds of the total investment, a level not seen since 2017.
Artificial innotifyigence is emerging as the primary driver of investment flows. Startups in the sector are attracting nearly 40% of the capital raised, driven by large-scale deals, including ASML’s investment in Mistral AI, valued at over €11 billion.
United Kingdom and Ireland
The UK, Europe’s leading venture capital market, is revealing growth in line with the continental average, with an expected 7.8% increase in deal value.
After a moderate start to the year, activity accelerated, reaching its highest level since 2022. AI accounted for a significant share of the largest funding rounds, particularly in computing infrastructure and life sciences.
Major global tech players also announced massive investments to support the UK’s AI ecosystem, further enhancing the market’s attractiveness.
In Ireland, the momentum is even stronger. The countest is expected to record its second-best year ever, with €1.57 billion raised, a 55% increase. Fintech and automation solutions are playing a central role there.
France and Benelux
The French environment was less favorable in 2025. Political instability and budobtainary adjustments weighed on investor confidence, slowing financing activity.
The value of deals is expected to decline by 11.7%, which would place France behind Germany in Europe. This decrease contrasts with the presence of some major transactions, including Mistral AI’s record-breaking funding round.
In the Benelux countries, the situation is mixed. Belgium is experiencing a sharp decline in investment, while the Netherlands and Luxembourg are posting double-digit growth, driven by a limited number of large funding rounds.
DACH
In Germany, the momentum observed at the launchning of the year has lost momentum. Investments are now more concentrated in early-stage funding rounds, resulting in an annual volume lower than that projected for 2024.
The funding gap during the growth phase remains a key challenge. The authorities have responded by launching a new fund of funds aimed at mobilizing nearly one billion euros to support the ecosystem.
Defense technologies stand out as a leading sector. Several major funding rounds confirm investor interest, against a backdrop of sharp increases in expected military spfinishing in the medium term.
In Austria and Switzerland, overall investment amounts have declined. Switzerland, however, is an exception in biotechnology, with a record year driven by a few significant deals.
Northern Europe
The compacter Nordic countries are revealing significant growth, unlike more established markets such as Sweden and Denmark, where investments have decreased.
Finland stands out by reaching historic levels of funding. A mega-fundraising round in the connected devices sector dominated the year, alongside significant rounds in quantum computing and space.
Iceland is also experiencing a strong rebound, with growth that could exceed 100% year-on-year.
Southern Europe
Southern Europe is emerging as the most dynamic region in 2025, with an expected 26.3% increase in transaction value.
Public policies supporting entrepreneurship and government initiatives have assisted strengthen the attractiveness of these markets, fostering the emergence of new technology hubs.
Spain accounts for the largest volumes, driven in particular by a major funding round in quantum computing. Greece, meanwhile, is revealing the quickest growth on the continent, despite a market that is still relatively compact.
Central and Eastern Europe
Venture capital remains under pressure in Central and Eastern Europe, with few large-scale deals this year. Some temporary increases, particularly in Latvia, Hungary, and Romania, are explained by a very limited number of transactions. Fintechs and AI solutions attract the bulk of the capital there.
The defense technology sector, however, could be a game-modifyr. Several specialized funds were launched in 2025, opening up new opportunities for the region.
Ukraine is establishing itself as a strategic innovation hub, supported by public initiatives and European partnerships. Fundraising in defense technologies, especially drones, demonstrates this dynamism.
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