And as was the case in the Q4 as well, Q1 was well above the prior five quarters by funding amounts, signaling that European venture funding may be gaining momentum.

Table of contents

• AI above 50%
• UK and France grew YoY
• Europe by stage
• In summary
• Methodology
• Glossary of funding terms

Still, Europe saw more capital going into fewer companies in Q1, with deal volume plummeting 40% year over year. Much of the decline was at seed stage (down 44%) and early stage (down 30%), while late-stage deal volume was in-line with the previous four quarters.

AI above 50%

Funding to Europe-based AI startups increased significantly last quarter, reaching $9.2 billion, or more than half of total venture funding to the region. That marks the sector鈥檚 highest proportion in a quarter on record.

The largest four rounds to startups based in Europe in Q1 were for AI-related companies. Data center builder , autonomous driving developer , and frontier lab for physical AI raised more than a billion each, and AI legaltech 鈥檚 funding totaled more than $500 million.

UK and France grew YoY

Startups from the U.K. and France raised more funding in Q1, totaling $7.4 billion and聽 $2.9 billion, respectively. Germany-based startups raised $1.9 billion, flat year over year.

France has emerged as the European leader for AI frontier labs. Last quarter, it saw Paris-based , founded by former AI chief , raise $1 billion in the continent鈥檚 largest seed funding round on record. The deal also marked only the second billion-dollar-plus funding deal for a European frontier lab, following s $2 billion round last year.

Europe by stage

In Q1, late-stage funding to Europe-based startups nearly doubled from a year ago. The largest rounds were across a variety of sectors, including AI hardware, fintech, agentic AI, productivity software, sensors, defense, e-commerce and energy.

A total of $9.2 billion was invested at late-stage across 83 deals, up 91% by amounts year over year.

Early-stage funding to the region鈥檚 startups fell from a year earlier 鈥� by around 20% 鈥� 小蓝视频色情网页版 data shows. Early-stage investment totaled $5.3 billion in Q1 across more than 240 funding rounds. Within early-stage funding, larger Series A rounds predominated in semiconductors, energy and healthcare.

Seed funding reached $3.1 billion in Q1 across more than 790 deals. The funding total was up 50% year over year, but largely due to the $1 billion round for Advanced Machine Intelligence.

In summary

Larger rounds into critical sectors in AI drove European startup funding up in Q1. A mix of Europe- and U.S.-based investors led the largest fundings last quarter into AI infrastructure, frontier labs, autonomous systems and applications.

Overall, Europe is in-line with global trends as capital concentrates into the largest deals in sectors that are surging due to AI.

Related 小蓝视频色情网页版 query:

Methodology

The data contained in this report comes directly from 小蓝视频色情网页版, and is based on reported data. Data is as of April 2, 2026.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

Please note that all funding values are given in U.S. dollars unless otherwise noted. 小蓝视频色情网页版 converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to 小蓝视频色情网页版 long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of funding terms

Seed and angel consists of seed, pre-seed and angel rounds. 小蓝视频色情网页版 also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. 小蓝视频色情网页版 includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the 鈥淪eries [Letter]鈥� naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round.

Technology growth is a private-equity round raised by a company that has previously raised a 鈥渧enture鈥� round. (So basically, any round from the previously defined stages.)

Illustration:

Overall, investors put $27.4 billion to work across seed- through growth-stage financings for Asian companies in Q1, per 小蓝视频色情网页版 data. That鈥檚 up about 20% from the prior quarter and nearly double year-ago levels.

Total funding also hit its highest level in more than three years, as charted below.

Funding went to bigger rounds, not more of them. Per 小蓝视频色情网页版 data, deal counts were flat with the prior quarter and up incrementally from prior year levels. In general, deal counts haven鈥檛 fluctuated widely from quarter to quarter over the past few years, as seen in the chart below.

Table of contents

• Most gains go to China
• Funding rose across stages, with most going to later stage
• Early stage was strong too
• Seed also showed an upswing
• A record quarter for AI
• Looking up
• Methodology
• Glossary of funding terms

Most gains go to China

An estimated $16.5 billion 鈥� or 60% of all Asian startup funding 鈥� went to China-based startups in Q1. It was also the third consecutive quarter for increased Chinese venture funding, which hit a multiyear low in the first half of 2025.

AI funding drove the gains in China. The quarter鈥檚 largest rounds all went to AI-focused companies, including foundational model startup , agentic AI company , and AI-enabled robot developer .

After China, the next-largest venture funding recipient in Asia was India, with $3.8 billion in reported Q1 investment, the highest number in the past four quarters. A big chunk of the funding went to the quarter鈥檚 largest equity round, a $600 million financing for AI systems developer .

Below, we chart out venture funding by country to seven leading investment hubs in Asia, showing how regional funding has trended since 2023.

Funding rose across stages, with most going to later stage

Later-stage, early-stage and seed funding all rose sequentially in the first quarter.

Of these, later-stage and technology-growth deals captured the highest share of funding, estimated at $11.7 billion in Q1. The quarter鈥檚 largest late-stage round by a long shot was a $2 billion Series C for Singapore-based data center company .

Overall, it was the largest later-stage tally in five quarters, as charted below.

Early stage was strong too

Early-stage investment also rose in Q1, hitting its highest point in two years.

Per 小蓝视频色情网页版 data, an estimated $11.2 billion went to Asian companies around Series A and Series B stages. That鈥檚 nearly double year-ago levels and up about 17% from the prior quarter, as charted below.

Seed also showed an upswing

Investors also poured more money into seed-stage companies, with AI as a core driver.

Around $3.6 billion went to reported seed and angel rounds in Q1, up 85% year over year and 45% quarter over quarter. Reported deal counts dipped a bit, indicating concentration of capital among a smaller subset of hot startups. However, we expect this number to rise over time, as seed deals are often added to the dataset weeks after they close.

A record quarter for AI

It would be remiss to close out a quarterly report these days without some mention of how much investment went to artificial intelligence.

For Q1, Asian startups in AI-related categories pulled in about $11.2 billion, per 小蓝视频色情网页版 data, the highest sum we鈥檝e tracked to date.

Looking up

Overall, the quarterly numbers show increasing momentum in China鈥檚 startup ecosystem, fueling much of the rising funding totals in Asia. Investment to startups in India, Singapore and South Korea also rose sequentially in Q1, while funding to Israel declined some.

In sum, it was a solid quarter, peppered with signs of optimism about the regional startup pipeline going forward.

Methodology

The data contained in this report comes directly from 小蓝视频色情网页版, and is based on reported data. Data is as of March 31, 2026.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

Please note that all funding values are given in U.S. dollars unless otherwise noted. 小蓝视频色情网页版 converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to 小蓝视频色情网页版 long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of funding terms

Seed and angel consists of seed, pre-seed and angel rounds. 小蓝视频色情网页版 also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. 小蓝视频色情网页版 includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the 鈥淪eries [Letter]鈥� naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round.

Technology growth is a private-equity round raised by a company that has previously raised a 鈥渧enture鈥� round. (So basically, any round from the previously defined stages.)

Illustration:

In 2025, only two states with a sizable venture scene saw a year-over-year gain in their share of U.S. venture funding: California and Washington. This held true even though several others, including New York and Texas, actually saw a pretty big bump in investment.

What gives? Well, last year saw a dramatic upward swing in North American venture investment, with annual startup funding up 46%. Artificial intelligence was the driver, with most investment going to companies in AI-related categories.

Not all geographies benefited equally. Across all categories, California drew the largest share of investment, at 64%. The next runners-up were New York, Massachusetts and Texas.

Overall, there were six states that captured 2% or more of U.S. venture funding last year, per 小蓝视频色情网页版 data. That鈥檚 a small group, but it鈥檚 not too atypical, as a few hubs reliably attract virtually all the capital.

To illustrate, we charted how investment share for the top six states breaks down over the past two calendar years.

Funding also rose year-over-year for each of the six states, as we chart below.

Deals and sectors that drove gains, by state

Leading sectors and rounds varied broadly by state. We previously covered the California companies whose huge funding hauls drove gains. Here are leaders in the other top states:

New York: For the second-largest funding hub, two of last year鈥檚 biggest funding rounds went to predictions marketplaces and . AI coding startup and food delivery provider were also investor favorites.

Massachusetts: The Boston area is known for its deep-tech prowess, and this showed up in the funding tallies. Fusion energy pioneer was the biggest funding recipient, followed by , a developer of brain-computer interfaces, and , which is focused on weight loss drugs.

Texas: Austin companies topped the list for Texas funding rounds last year. This included , a provider of residential backup battery systems, and , a developer of autonomous naval and maritime vessels.

Washington: The Pacific Northwest powerhouse has a fairly diversified startup scene, as evidenced by the largest funding recipients.These include nuclear power company , and reusable rocket developer .

Colorado: There鈥檚 very little snow in Colorado this winter, but plenty of capital has accumulated. Lead funding recipients include AI infrastructure company , which secured a $1.4 billion Series E in October, and quantum computing startup , which raised a $600 million Series B.

Other states

OK, so you may have noticed that there are 44 other states we didn鈥檛 discuss and which also do attract some startup investment.

This includes five that are under 2% of national funding but still pulled in over $2 billion last year:聽 Florida, Pennsylvania, Illinois, North Carolina and Virginia.

Seven others 鈥� Utah, Tennessee, Maryland, Ohio, Minnesota, Georgia and New Jersey 鈥� attracted $1 billion or more in startup funding last year and most saw year-over-year gains.

But because venture is so heavily concentrated elsewhere, these 12 states only drew about 11% of all nationwide investment.聽

Catalysts for change?

There鈥檚 no law, of course, that says venture investment must remain so geographically concentrated. Certainly there are base characteristics that make for a sustainable startup hub, including well-regarded research universities and a concentration of tech and biotech talent and employers. But a number of places meet these baselines, making them potentially fertile ground for greater investment.

Of late, however, capital seems to continue to concentrate on bold new ventures in the biggest existing hubs.

Related reading:

• What鈥檚 Fueling California鈥檚 Record Run For Startup Funding?
• North American Startup Funding Soared 46% In 2025, Driven By AI Boom

Illustration:

Overall, venture funding in the region increased to $4.1 billion across seed- through growth-stage deals in 2025, up from $3.6 billion in 2024. Investors active in the area who spoke with 小蓝视频色情网页版 News also said they remain bullish on Latin America’s potential for startup innovation, particularly in financial services and as the region’s middle class continues to expand.

However, venture dollars invested in 2025 across such deals still totaled less than half of the $8.4 billion invested in 2022, and were a fraction of the amount invested in 2021, a record-setting year for the region鈥檚 startup investment levels.

In the fourth quarter, venture funding in Latin America amounted to $1.085 billion, down 16% from $1.285 billion raised by LatAm startups in Q4 2024, and up 1% from the $1.07 billion raised in Q3 2025.

Table of contents

• Brazil still leads
• Late stage and technology growth
• Early stage
• Seed and angel
• Investor POV: An inflection point
• Methodology
• Glossary of funding terms

Brazil still leads

Following historical trends, Brazil remained the region鈥檚 top venture investment destination in 2025, followed by Mexico. In total, Brazil-based startups raised $2.1 billion during the year, up 10.5% from the $1.9 billion raised in 2024. Mexico-based startups brought in $1.1 billion in funding in 2025, up 53% from the $718 million raised in 2024.

For perspective, we charted out total investment, color-coded by stage, for the past 12 quarters below.

Late stage and technology growth

Of the total amount raised in 2025, $1.63 billion went into late-stage and growth deals, up 14% year over year. In the fourth quarter, just $251 million flowed into late-stage and growth deals, down 69% compared to $806 million in Q4 2024. That鈥檚 also down 39.2% compared to the third quarter of 2025, when startups in the region raised $413 million in late-stage and growth funding.

Notably, Mexico-based startups had the distinction of raising the three largest rounds of 2025. , a Mexico City-based startup offering credit cards, picked up $160 million in a March Series A led by at a $1.5 billion valuation. Then, just over seven months later, the fintech raised , more than doubling its valuation to $3.1 billion.

And, in late June, Mexico City-based fintech startup 鈥� believed to be Mexico鈥檚 largest digital bank 鈥�- announced that valued the company at $800 million.

Early stage

Meanwhile, early-stage investment surged in the fourth quarter of 2025 with $690 million flowing into startups, up an impressive 112% compared to the $325 million in Q4 2024. For 2025 as a whole, early-stage investment totaled nearly $2 billion, up 31.9% compared to the $1.48 billion in all of 2024.

Seed and angel

Seed and angel investment totaled $144 million for the fourth quarter, which marked a 6.5% decrease year over. For all of 2025, seed and angel investment amounted to $540 million, down 22% compared to the $692 million raised in 2024.

Investor POV: An inflection point

, a partner at who is based in Rio de Janeiro, told 小蓝视频色情网页版 News via email that his firm is optimistic about Latin America because the region 鈥渃ombines scale, a young and increasingly digital population, and deep structural inefficiencies that technology can solve 鈥� especially across financial services, commerce, logistics, health, and education.鈥�

In his view, Latin America is now reaching a structural inflection point. Greater digital access, middle-class expansion, infrastructure investment and pro-innovation regulation 鈥� such as open finance in Brazil 鈥� are converging to unlock new business models across the digital economy, he said.

At the same time, significant inefficiencies remain, which creates more opportunity. In Brazil, for example, corporate credit represents around 32% of GDP, compared with roughly 73% in the United States, a gap that illustrates how much value is still to be created, according to Nicklas.

鈥淭he region has already proven its ability to build category leaders, and growing connectivity between the U.S. and Latin America reinforces Valor鈥檚 cross-border strategy, supporting both Latin companies expanding globally and global companies entering the region,鈥� he added.

鈥淟atin America is also emerging as a pragmatic laboratory for blockchain adoption, driven by real economic needs,鈥� he said.

Fintech and broader financial infrastructure are core focus areas for Valor Capital, including payments, digital banking, crypto and digital assets, and platforms that expand financial inclusion and efficiency, particularly in credit.

Brazil, in particular, is central to this thesis, he believes.

鈥淭he country has become a global benchmark for regulatory leadership, with what is often called the 鈥淏razil Stack鈥� 鈥� digital identity through Gov.br, instant payments via , and data-sharing frameworks such as Open Finance, alongside the development of Drex,鈥� he noted. 鈥淭hese modern rails materially reduce friction and create the foundation for a new generation of financial and digital products.鈥�

Beyond financial services, Valor is increasingly focused on enterprise and B2B software that digitize large, inefficient industries such as logistics, retail and services. The firm also invests in technology-enabled consumer, commerce and infrastructure plays, from mobility and logistics to edtech and healthtech.

, a Mexico City-based partner at , told 小蓝视频色情网页版 News that her firm is 鈥渋ncredibly bullish鈥� on Latin America.

鈥淭he opportunity is still immense,鈥� she wrote via email. 鈥淲e鈥檙e still a region with deeply significant challenges, which translates into incredible opportunities for ambitious entrepreneurs.鈥�

The region is also still profoundly underinvested, in her view, 鈥渨ith major capitalization needs,鈥� especially in early stages.

鈥淎s a region, we have all the ingredients: strong technical talent, ambition, resilience, and massive opportunities,鈥� she said. 鈥淎nd when you add capital that genuinely provides differentiated value, it becomes an incredibly exciting recipe.鈥�

As with Valor, fintech remains the asset class favorite for 500 Global. However, Mendoza believes there is room for disruption and capitalization 鈥渁cross every industry鈥� in the region.

partner noted that her firm has been investing in Latin America since 2020 and has backed more than 20 companies across the region.

Fintech makes up about half of Hustle Fund鈥檚 LatAm investments.

鈥淣eobanks and payments laid the groundwork,鈥� she said. 鈥淣ow we鈥檙e seeing a second wave of more vertical and infrastructure-driven fintech, SME financial services, underwriting, insurtech, and digital wealth.鈥�

Beyond fintech, Hustle Fund is also excited about AI-native enterprise and vertical software in under-digitized sectors like healthcare, logistics, manufacturing and back-office ops.

鈥淭hese are markets where strong fundamentals and capital efficiency really matter, and LatAm founders are building with that mindset from day one,鈥� Bryant told 小蓝视频色情网页版 News.

While acknowledging that Brazil 鈥渟till matters a lot鈥� given its GDP and scale of outcomes, as in the case of , Bryant said Hustle Fund is currently especially excited about Mexico.

The country has become a 鈥渞eal regional hub鈥� as founders and operators relocate there, 鈥渄riven by nearshoring, proximity to the U.S., and a growing density of talent and capital,鈥� she added.

鈥淣etworks and capital are helping LatAm not only mature but compound, as experienced operators from Nubank, Newports, , and others are starting their next act, and global talent is being drawn to Mexico City in particular,鈥� she said. 鈥淚鈥檓 especially excited about ecosystems with strong fintech talent like Colombia and technical talent like Argentina that could start regionally and expand, and founders coming out of overlooked geographies.鈥�

Methodology

The data contained in this report comes directly from 小蓝视频色情网页版, and is based on reported data. Data is as of Jan. 4, 2026.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

Please note that all funding values are given in U.S. dollars unless otherwise noted. 小蓝视频色情网页版 converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to 小蓝视频色情网页版 long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of funding terms

Seed and angel consists of seed, pre-seed and angel rounds. 小蓝视频色情网页版 also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. 小蓝视频色情网页版 includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the 鈥淪eries [Letter]鈥� naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round.

Technology growth is a private-equity round raised by a company that has previously raised a 鈥渧enture鈥� round. (So basically, any round from the previously defined stages.)

Related reading:

• In Q2, Mexico Surpasses Brazil In Venture Dollars For First Time In Over A Decade
• Brazil Back On Top In Q3 When It Comes To Venture Funding In Latin America

Illustration:

$4 trillion and 100,000 new companies.

These are the outcomes of a quarter-century of venture capital investments into startups.

Since the new millennium, $4.2 trillion has been invested into the global startup economy, producing 97,982 scaleups.

Of these, 7,030 have raised more than $100 million. We call them the Scalers. And 473 have surpassed the $1 billion mark in capital raised. We call them the Super Scalers.

These are just some of the findings of the latest report, produced by with for the held in Paris last month.

The innovation paradox: Nothing seems to move

While comparing the world鈥檚 Startup Atlas 2025 with the 2024 edition, one thing becomes clear: despite the 鈥渘ew economy鈥� continuing to generate industry disruptors at a steady pace 鈥� with nearly 8,000 new scaleups added since January 鈥� the overall picture of global innovation remains largely unchanged.

And for much of the world, that鈥檚 not good news. The balance of power has barely moved.

• North America continues to dominate, with 43% of the world鈥檚 scaleups, while attracting an even larger share of capital 鈥� now exactly half of all global scaleup investments.
• The APAC region maintains its second-place position, with about 27,000 scaleups (27% of the global volume) that have raised $1.3 trillion (31% of total capital).
• Europe remains stuck in third place, failing to gain relevance. The Old Continent is actually getting 鈥渙ld,鈥� accounting for 22% of scaleups but just 13% of global investments. In other words, Europe doesn鈥檛 have enough companies, and even worse, they鈥檙e under-capitalized.
• The Middle East, Latin America and Africa still struggle to meaningfully appear on the global map.

In a world where concentration attracts more concentration, reshaping the landscape takes time. But the iceberg rule applies: most activity happens below the surface 鈥� and reveals itself only much later. And today, there is far more dynamism beneath the surface than the top-line numbers suggest.

A decade in the world of innovation

But just zoom out, and everything changes.

A decade on planet Startup is a geological era.

The Innovation Ecosystem Life Cycle Curve hasn鈥檛 changed shape, but it has become dramatically more crowded, with far more weight shifted toward the later stages.

In 2015, fewer than 500 startup ecosystems sat on the global curve. The Star stage was an exclusive club of just three tech hubs (Silicon Valley, New York and Beijing), and only 13 ecosystems had reached the Scaleup stage. In short, the startup scene was relatively simple and still heavily concentrated in the U.S. and APAC.

Ten years later, the landscape is radically different. Nearly 900 ecosystems now appear on the curve. The Star stage includes 19 ecosystems (a 6x increase), while the Scaleup stage counts 45 (3.5x growth).

If we look into the crystal ball, it鈥檚 easy to foresee that by 2030 the life cycle curve may host 1,500-plus ecosystems, a massive expansion.

Of these, 40-50 are likely to reach the Star stage, and 90-100 the Scaleup stage. Practically speaking, this means one thing for innovation hunters (VCs and corporates): Navigating this landscape is about to become a serious headache.

The geography of the startup economy has also shifted.

On the right-hand side 鈥� the upper stages 鈥� the dominance pattern remains similar: once led by the U.S. (2) and China (1), the Star stage is now shared by the U.S. and APAC (8 each), with Israel, London and Paris as notable exceptions.

But moving left along the curve, Europe is gaining ground.

At the Scaleup stage, Europe now counts 12 ecosystems (up from just two a decade ago), surpassing APAC.

And in the startup and standup stages, Europe is now the region with the highest number of ecosystems overall.

In a nutshell: Europe seems to have built a broad, diversified base 鈥� but the question remains: Is this latent potential waiting to emerge, or simply the result of structural fragmentation?

A final note: Latin America, the Middle East and Africa are 鈥� with a few exceptions 鈥� almost absent from the Star (Israel) and Scaleup (Dubai, S茫o Paulo and Istanbul) stages. In the Startup stage, they represent only 10 out of 93 ecosystems. In the Standup stage, we finally see larger volumes (73 out of 721).

The question is: When will this immense innovation potential finally surface?

鈥斅燜or more insights, you can download the report: 鈥淭he Calm Before the AI Storm: Global Innovation Ecosystems: Who Leads, Who Lags, and Who Could Rise鈥� .

is chairman of and a professor at . He is a serial entrepreneur who has started three startups in his career, the last of which is , among the five Italian scaleups that have raised the largest amount of capital. He is recognized among the leading international experts in open innovation and has wide experience in setting up and managing open innovation projects 鈥� venture clients, venture builders, intrapreneurship, CVCs 鈥� with large multinational companies, as well as advising and training on this subject. Onetti has a column on () and several other tech blogs.

Related reading:

• Innovation Policies: The Australian Lesson Focusing Startup Investments On A Few Strategic Sectors
• AI Is Gorging On Venture Capital. This Is Why 鈥楶hysical AI鈥� Is Next
• The Dual-Use Tech Surge: Innovation鈥檚 Double-Edged Sword

Illustration:

New backers 1听补苍诲 co-led the financing, which included participation from a slew of other investors, including , , , , , , and .

Founded in 2024, Black Forest has raised a total of $450 million in funding, per 小蓝视频色情网页版 . Its headquarters are in Freiburg, Germany, but it also has a lab in San Francisco. The company is known for its Flux foundation models of AI generation. It touts that its open models are 鈥渢he most popular image models鈥� on , and that companies such as , Canva, and are 鈥渂uilding鈥� on its models.

The startup has received attention not only for the fact that its models help generate images, but also for the fact that they help edit them, too.

Europe鈥檚 AI scene slowly gains traction

Europe as a whole has lagged the U.S. and China in the race for global AI dominance. However, a number of players such as Black Forest Labs are making it increasingly competitive. The continent saw $5.2 billion invested in its AI startups in Q3, up from $2 billion in the same quarter last year, per 小蓝视频色情网页版 data. (Still, that remains a fraction of the $35.7 billion that went to North American AI startups in Q3.)

Largest fundings for European AI startups

In early September, Paris-based generative AI startup announced a roughly $2 billion Series C round. Per 小蓝视频色情网页版 data, Mistral鈥檚 Series C marked the largest-ever venture round raised by a European AI company.

Black Forest Labs鈥� massive raise is notable in that it means that Mistral AI is no longer the only GenAI play near the top of the rankings of the largest European AI rounds. After Mistral, here are the four next-largest AI equity funding deals for Europe-based startups, per 小蓝视频色情网页版 data:

• , $1.1B, Series B: London-based AI infrastructure company Nscale raised $1.1 billion in a September 2025 round led by at a $3.1 billion valuation. (Just one week later, it raised a $433 million 鈥�.鈥�)
• , $1.08B, Series C: London-based autonomous driving software developer Wayve raised $1.08 billion in a May 2024 Series C led by .
• , $1B, Series D: Celonis, a provider of 鈥減rocess mining鈥� tools for businesses to find and fix inefficiencies, which has headquarters in Munich and New York, secured $1 billion in a 2021 funding round.
• , $700M, Series D: Helsing, a developer of AI-enabled autonomous systems for the defense industry, including drones, raised $700 million in a June 2025 funding round.

(For additional context, is a list of all European AI-related financings of $200 million or more from the past five years.)

Despite the impressive fundraises, Europe鈥檚 largest generative AI startups are still valued quite a bit lower than their U.S. counterparts. San Francisco-based is now valued at $183 billion, and in October completed a secondary share sale amounting to $6.6 billion, giving it a $500 billion valuation.

Related 小蓝视频色情网页版 query:

Related reading:

• Mistral鈥檚 $2B Series C Is Europe鈥檚 Largest AI Round By A Lot
• Europe鈥檚 Venture Scene Held Steady In Q3, Buoyed By Early-Stage Funding And Klarna IPO

Illustration:

While late-stage startup investment in Europe remains relatively muted, early-stage funding has quietly become Europe鈥檚 engine of resilience 鈥� helping sustain overall funding levels even as global capital continues to concentrate around massive AI rounds in the U.S., 小蓝视频色情网页版 data shows.

All told, European startups pulled in $13.1 billion across more than 1,000 deals last quarter, flat quarter over quarter but up 22% year over year, per 小蓝视频色情网页版 data. Early-stage investment accounted for roughly 60% of that total, buoyed by strong activity in deep tech, biotech and AI applications.

This contrasts with North America, which has seen a surge of megarounds of $500 million or more, largely into AI-related companies, over the past four quarters. North American companies raised 68% of global funding in Q3, up 10 percentage points from a year ago, with two-thirds invested in later-stage financings.

Table of contents

• Klarna debuts and strong M&A
• AI stepped up
• Late stage
• Early stage up
• Seed
• Robust early stage
• Methodology
• Glossary of funding terms

Klarna debuts and strong M&A

Sweden-based Klarna went public on the in Q3 at a value of $15.1 billion, marking the completion of one of the most-anticipated European debuts in recent years. Still, while Klarna鈥檚 listing price was well above its most recent private valuation at $6.7 billion in 2022, it was still far below its 2021 valuation of $45.5 billion.

Five European companies were also acquired for close to or more than a billion dollars each last quarter, including Sweden-based enterprise knowledge platform , which was purchased by , and Germany-based conversational AI platform , acquired by . Other billion-dollar startup exits out of Europe last quarter were in healthcare 鈥� and 鈥� and , in asset management.

AI stepped up

Close to 40% of European funding was invested in AI-related startups last quarter, totaling $5.2 billion, per 小蓝视频色情网页版 data. That was up from $2 billion in Q3 2024.

The large fundraisers in the space were Paris-based frontier model company , which raised $2 billion, and London-based , a 1-year-old data center and cloud provider that raised $1.1 billion. (Within a week in early October, Nscale raised another $433 million from , and , among others.)

Other large rounds in AI last quarter were raised by Sweden-based vibe coding startup , London-based accounts payable company , and Switzerland drone and robotics operations platform .

Late stage

Around $5.4 billion was invested last quarter across 75 deals into Europe startups at growth stage, per 小蓝视频色情网页版 data. That represents around 9% of global late-stage venture funding, the smallest proportion compared to other funding stages. The

Other late-stage fundings went to London-based smartphone and device maker , Netherlands-based website design , and Italy-based embedded device security platform .

Early stage up

Early-stage funding in Q3 was up year over year by 31%, with $6.1 billion invested across more than 257 funding rounds. European funding represented 20% of global early-stage funding.

Early-stage rounds also went to Finland-based , Belgium-based , and U.K.-based material science company .

Seed

European seed funding totaled $1.7 billion in Q3 across 745 seed rounds, representing 18% of global seed funding.

Large seed rounds were raised in energy, AI, biotech, fintech, autonomous driving and robotics, among other sectors.

Robust early stage

Early-stage funding to European startups picked up in Q3 with large rounds in deeptech, biotech and AI applications across many European cities.

Europe鈥檚 early-stage funding represents around 20% of global venture funding, while funding lags at the later stages, coming in at 9% of global funding.

So while Europe’s startups haven’t produced the splashy growth figures of their North American counterparts, the region has now delivered several sequential quarters of steady funding, not to mention resilient early-stage investment and strong exits in Q3. In fact, four of the nine companies acquired globally for more than $1 billion last quarter hail from Europe. As Europe and the U.S. come closer together, with many European founders launching in the U.S. market earlier, the question is: Will Europe continue to create those standout $10 billion-plus companies as it did most recently with Klarna?

Methodology

The data contained in this report comes directly from 小蓝视频色情网页版, and is based on reported data. Data is as of Oct. 6, 2025.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

Please note that all funding values are given in U.S. dollars unless otherwise noted. 小蓝视频色情网页版 converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to 小蓝视频色情网页版 long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of funding terms

Seed and angel consists of seed, pre-seed and angel rounds. 小蓝视频色情网页版 also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. 小蓝视频色情网页版 includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the 鈥淪eries [Letter]鈥� naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round.

Technology growth is a private-equity round raised by a company that has previously raised a 鈥渧enture鈥� round. (So basically, any round from the previously defined stages.)

Illustration:

Four of the top six venture markets in the region saw declines. Along with China, India, Singapore and Japan all sank lower. Only Israel and Japan saw upticks as the region continues to battle economic fluctuations, conflicts, geopolitical tensions and a possible trade war.

Let鈥檚 take a look at exactly what鈥檚 happening in the region as we break down some of its biggest venture markets by country.

China

China鈥檚 venture market has continued to decline as the country鈥檚 鈥渄eflationary spiral鈥� has not subsided and now a possible trade war with the U.S. swirls.

The venture funding market has precipitously declined since just after COVID, with just a quarter here or there that saw a slight uptick.

The first quarter of 2025 was not one of those outliers, as China鈥檚 share of venture was almost halved from just a year ago. Chinese startups raised only $6.5 billion, compared to $12.5 billion in Q1 2024 and $8.2 billion in Q4.

However, the region鈥檚 largest late-stage deals all came from China, including:

• Waste disposal firm raised a $692 million venture round in March;
• , which provides internet-enabled solutions for the textile industry, raised a $460 million Series C in January; and
• China-based , a startup creating AI models and a Chinese competitor to , raised a $247 million private equity round last month.

How China鈥檚 venture market goes obviously dictates how the Asia market will go 鈥� as it is easily the richest. The decline in China funding has directly led to the region鈥檚 dropping numbers.

For those looking for good news from the world鈥檚 second-largest economy, it has been that Zhipu AI aims to go public as soon as October. Perhaps a strong showing will bring money back into the country鈥檚 burgeoning AI sector.

However, Zhipu is on the 鈥檚 export blacklist for allegedly contributing to China鈥檚 military. That illustrates yet another issue in the region 鈥� difficulty securing U.S. investment, something the current tensions between the two countries will not change.

More decreases

Of course, China was not alone in Asia鈥檚 venture decline.

Venture dollars in India 鈥� the region鈥檚 second-biggest market 鈥� dropped 26% year to year, with startups pulling in only $2.8 billion in Q1 this year. That鈥檚 even down slightly from the $3 billion it saw in the final quarter of last year.

The country did see two of Asia鈥檚 biggest raises outside of China, though, as mining firm locked up a $244 million venture round in Q1, and commerce platform raised a $173 million corporate round from .

Similarly, both Singapore and South Korea saw drops. Singapore鈥檚 fall was more pronounced, declining about 80% from both Q1 and Q4 last year. Startups in the country raised a minuscule $400 million last quarter.

South Korea-based startups saw about a 38% drop in funding from Q1 2024, raising only $500 million.

The upmarkets

Only two venture markets in Asia posted a Q1 increase from the year earlier.

Israel saw a 38% hike to $1.1 billion in the quarter from the $800 million raised in Q1 2024. That was in part thanks to Israel-based raising a $170 million Series C led by .

Israel-based startups saw an even bigger bump from the $700 million raised in Q4 last year.

The quarter marked an impressive comeback for Israel鈥檚 venture market 鈥� which took a hit in 2024 as the country was mired in violent conflict with Hamas and other groups in the Middle East.

Japan also saw a slight increase, as its Q1 venture funding hit $600 million, up from $500 million in Q1 last year, but down more than half from the $1.3 billion raised in Q4.

Venture capitalists in Asia have a unique set of obstacles they must confront if the region is to get its private market back on track. While China sets the pace for the region, many other venture-rich countries helped push last quarter鈥檚 decline even deeper.

It may get worse before it gets better for investors.

Related reading:

• Q1 Global Startup Funding Posts Strongest Quarter Since Q2 2022 With A Third Going To Massive OpenAI Deal聽聽
• Asia Sags To Lows Not Seen Since 2014
• China Leads Asia鈥檚 Venture Downturn 鈥� But Other Countries Didn鈥檛 Help

Illustration:

Follow 小蓝视频色情网页版 News on &

As a follow-up to the deep dive into Southern startup funding data 小蓝视频色情网页版 News did last week, we ranked the most active investors in each sub-region of the South as defined by the U.S. Census Bureau.

As will be the case for all charts we鈥檒l discuss here, we鈥檝e counted the number of venture investments (angel, seed, convertible notes, Series A, Series B, etc.) each Southern investor made鈥攁nd was recorded in 小蓝视频色情网页版 data鈥攆rom the beginning of 2017 through the middle of March 2018.

West South Central鈥檚 Most Active Investors

We鈥檒l go from West to East, starting first with the inelegantly-named “West South Central” subregion comprised of Oklahoma, Arkansas, Louisiana, and Texas. This subregion accounted for 28 percent of the South鈥檚 deal volume in 2017, and Texan startups raised 27 percent of all Southern rounds between 2017 and mid-march 2018.

The chart below displays the most active investors out of the more than 200 investors from West South Central states which made investments in the past fifteen-ish months.

As will turn out to be a common theme, some of the most active investors are going to be accelerator programs and other investors primarily focused on early-stage ventures. What鈥檚 less common is an angel investor as active as Dallas Mavericks owner and television personality . According to 小蓝视频色情网页版 data, Cuban made nineteen recorded venture investments between January 2017 and March 2018.

Other highlights in this list include Austin-based , one of the most active accelerator programs in the entire South. is also interesting given that it鈥檚 one of the few most active investors with a specific sector focus in esports. is the only family foundation to make it near the top of any of our ranks here.

East South Central鈥檚 Most Active Investors

Kentucky, Tennessee, Mississippi, and Alabama are home to another set of interesting investors, albeit ones that are generally less active than their counterparts a little further west. Startups in these four states raised just eight percent of the region鈥檚 venture rounds in 2017.

Below, you鈥檒l find a chart displaying the most active investors in this region.

The most active investor in this subregion, , is an early-stage biotechnology and agtech investor. The firm has made recent investments in companies like drone-based crop analytics provider , blood pathogen separation technology firm , and , which uses machine learning to anticipate vehicle service needs.

is based in Birmingham鈥檚 Innovation Depot, a 140,000 square foot facility which is home to nearly 100 startups and small businesses. Chattanooga, Tennessee-based is another program which focuses on the logistics sector. Dynamo鈥檚 portfolio is also surprisingly diverse, from a geographic perspective, with investments in Seattle-based , London, UK-based , and , which is based in Monterrey, Mexico.

To close our adventure out, let鈥檚 move on to the South Atlantic.

South Atlantic鈥檚 Most Active Investors

Granted, the South Atlantic does have a few advantages over the other two subregions of the American South, not least of which is the large number of states. But, nonetheless, the South Atlantic accounted for 64 percent of the known Southern state deal volume in 2017.

The chart below displays the most active investors based in the South Atlantic states.

D.C.-based is a VC fund focused primarily on seed and Series A-stage rounds raised by companies that have international expansion potential. helps to broker connections between U.S. startups and markets in the Middle East and North Africa. Its portfolio companies include , , , and , among .

Other notable investors on this list include , a food-focused accelerator that鈥檚 made seed-stage investments in food startups like , pork-free cracklin鈥� manufacturer , and “an ice cream company that pays devotion to the Dairy Gods” called .

The is another. Created in 1998 by the Maryland State Legislature to commercialize and invest in technology developed in the state鈥檚 universities, the group makes a number of investments in research-based ventures like cybersecurity companies , , , and .

What We Learned Here

Although the South isn鈥檛 traditionally thought of as a particularly technical or entrepreneurial region (compared to, say, the West Coast) it鈥檚 in most ways no different than the rest of the USA. There are plenty of startup companies of all shapes, sizes, and focus areas, and there are investors of all types, too.

From prolific super-angels like Mark Cuban, to sector-focused accelerator programs like Dynamo and Union Kitchen, and strategic investors touting a particular competitive edge like TEDCO or Arab Angel Fund, the South鈥檚 mix of investors is as diverse as the region itself.

Although 小蓝视频色情网页版 News has previously shown that investors from the South are the most likely to invest outside of their home metro areas, they鈥檙e no more or less likely to invest outside the South than investors from the Midwest or Northeast to invest outside their home regions either. It鈥檚 likely that the South鈥檚 venture capital ecosystem will continue to grow, particularly as more founders begin to catch on to the low cost of living, excellent food, and rich if complicated history of the region.

滨濒濒耻蝉迟谤补迟颈辞苍:听