Europe

Europe’s venture capital market continues to benefit from its geographic and sectoral diversity, with investment activity well distributed across countries and industries. On a country basis, the UK led investment in Q4’25 with $6.8 billion deployed, followed by Germany ($2.4 billion), France ($2.3 billion), and Israel ($1.5 billion), underscoring the depth of the region’s innovation ecosystem beyond any single market.

This breadth was further reflected in Q4’25 megadeal activity, as a wide range of countries accounted for the largest transactions of the quarter. Six different jurisdictions represented the six largest VC deals, including the UK (Revolut, $3 billion), Finland (Oura, $907.7 million), France (Brevo, $578 million), the Netherlands (Picnic, $498.1 million), Germany (Tubulis, $360.9 million), and Greece (Spotawheel, $348 million).

Sector diversity was equally pronounced, with $100 million-plus rounds spanning fintech, healthtech, defense tech, cleantech, and robotics. Across many of these deals, AI served as a foundational enabler, underpinning product innovation and scalability regardless of sector. Together, this geographic and thematic dispersion highlights the resilience and breadth of the European VC market, positioning it well for sustained investment activity despite ongoing macroeconomic uncertainty.

AI was a big ticket for VC investors in Europe in 2025. While LLMs and AI infrastructure attracted attention earlier in the year, Q4’25 saw VC investors increasingly focusing on application layer solutions. During the quarter, France-based AI-enabled digital marketing platform Brevo raised $578 million, Germany-based image and video generative AI firm Black Forest Labs raised $300 million and workflow automation company n8n raised $180 million, and UK-based text-to-video company Synthesia raised $200 million.

Global geopolitical tensions and conflicts kept defense tech high on the radar of VC investors throughout 2025, with investments in the space growing considerably year-over-year. While drones attracted a large share of capital during the year, Q4’25 saw VC investors interested in a broader array of defense tech capabilities, including dual-use capabilities, cybersecurity, and solutions focused on enhancing the defensibility of critical infrastructure. Regional governments and defense alliances are expected to spur investment in defense tech in 2026, with both the NATO Innovation Fund and European Defense Fund (EDF) actively supporting innovation. For 2025, the EU has committed $1.1 billion to the EDF.¹

Healthtech and biotech continued to attract robust interest from VC investors in Europe during 2025. In Q4’25, Finland-based health wearables company Oura raised a $907.7 million round in the region’s largest raise by a healthtech ever. The quarter also saw Germany-based cancer treatment company Tubulis raise $360.9 million, Denmark-based Hemab raise $157 million, and Italy-based Aavantgarde raise $141 million.

VC investment in Germany rose quarter-over-quarter, led by a $360.9 million raise by biotech Tubulis. AI continued to attract significant interest in the country-evidenced by Black Forest Labs’ $300 million Series B raise in Q4’25. Quantum computing, semiconductors, battery storage, and battery infrastructure also garnered interest from VC investors in Germany. In recent quarters, Germany has seen solid growth in consortium-led VC deals as VC funds worked together to support high potential companies-with many of these deals including at least one non-European investor. After an extended drought, Germany also saw fundraising activity start to pick up in Q4’25 as several of VC firms began to raise new funds.

During Q4’25, venture capital investment in the Nordics built on the positive momentum established in Q3’25, rising to a nine-quarter high. The quarter was highlighted by a $907 million raise by health monitoring wearables company Oura, marking the largest VC funding round ever completed in Finland. The region also recorded several additional $100 million-plus financings, including rounds for Denmark-based fintech Flatpay ($168 million), biotech company Hemab ($157 million) and Sweden-based AI firms Lovable ($330 million) and Legora ($150 million). Across the region, VC investors concentrated capital on emerging category leaders spanning healthtech, fintech, and legaltech, with AI serving as a common enabling theme across many of the companies attracting funding. This pattern reflects continued investor conviction in scalable, technology-driven platforms with defensible market positions and clear long-term growth potential.

Beyond these core sectors, defense tech, spacetech, and companies focused on dual-use technologies also attracted meaningful interest in the Nordics. In particular, firms applying AI to defense-related use cases gained traction, including NestAI, which raised $115 million in Q4’25 to support the development of AI-powered defense tech solutions and new space company Iceye ($232 million). Looking ahead, investor sentiment across the Nordics remains constructive. The strong finish to 2025 has reinforced expectations that VC investment momentum will carry into 2026, while improving market conditions and growing confidence in exit pathways are expected to support increased M&A activity as investors seek liquidity opportunities.

Following a 13 quarter high in Q3’25, venture capital investment in the UK moderated in Q4’25, even with a $3 billion funding round by Revolut contributing significantly to the quarter’s total. The fintech sector continued to attract strong investor interest, with additional notable raises including $200 million for Moniepoint and $177 million for Zilch.

AI also remained a key area of focus for VC investors during the quarter. Companies such as generative AI firm Synthesia and legal workflow platform Navys, secured meaningful funding rounds, underscoring sustained appetite for AI-driven innovation. Within the UK, universities continued to play a central role in nurturing the AI ecosystem, serving as important hubs for research, talent development, and the commercialization of next-generation AI solutions.

Venture capital investment in Ireland was somewhat subdued in Q4’25, although full-year activity in 2025 remained solid and exceeded the total recorded in 2024. Investor sentiment was resilient in the face of geopolitical challenges, with fintech and medtech attracting the greatest share of VC interest.

While enthusiasm for AI continues to build in Ireland, investment in the sector has so far skewed towards smaller, more targeted rounds, primarily supporting niche applications and vertical-specific solutions rather than large-scale platforms. Looking ahead to 2026, Ireland appears well positioned for continued growth in VC investment as maturing companies begin to attract larger deal sizes. As confidence in the market strengthens, deal volume is also expected to improve alongside investment values.

VC investors in Austria continued to be selective in Q4’25, continuing a trend seen throughout the year. VC activity remained stable, driven by a small number of high-quality transactions. Entering 2026, Austria’s VC market is in a healthier position than seen in previous years; companies raising funds now have had to hone their efficiencies and prove their value-which has helped drive a maturation in the overall VC ecosystem. Within Austria, embedded AI solutions have started to gain traction, particularly in areas like industrial solutions and B2B solutions focused on driving measurable productivity.