A Dealroom report suggests that energy remains the top sector for VC funding in Europe, while generative AI represented 10pc of the continent’s VC funding so far this year.
European tech investment has surged in the first half of 2024, creating hope that the ecosystem is on a path to recovery after some difficulties last year.
That’s according to a report from Dealroom, a company that reports data on global start-ups. Its latest report found that some massive funding rounds involving generative AI and energy companies pushed Europe’s venture capital (VC) funding to nearly $30bn so far this year, a 12pc increase compared to the same period in 2023.
The report said energy was the most funded sector so far, raising $5.6bn so far this year. Hydrogen companies in particular raised some of the biggest investment rounds in the second quarter of 2024, such as Paris-based HysetCo, which raised €200m to decarbonise urban transport with hydrogen taxis.
Meanwhile, the generative AI sector had its strongest period to date, raising $2.6bn. AI investments now make up 18pc of all the VC funding in Europe based on this report, up from 6.9pc 10 years ago. Generative AI in particular represented 10pc of all European VC funding so far this year.
“These figures are very encouraging and demonstrate how Europe can be a key player in the immense economic opportunity unleashed by AI, which I like to call a European RenAIssance,” said Jeannette zu Fürstenberg, MD and head of Europe at General Catalyst.
“[We believe] leveraging the power of AI to bolster European productivity and growth will be key when building globally successful technology companies on this continent. The uptick in late-stage funding in the first half of this year demonstrates the appetite for Europe’s most ambitious companies.”
Autonomous driving start-up Wayve had the biggest funding round in the AI sector this year, raising $1.1bn in a Series C funding round. This was followed by Mistral AI, which raised more than $500m in equity financing earlier this year.
But these sectors aren’t the only ones showing success, as the fintech and health sectors managed to raise $5.3bn each this year. More than 250 health-tech companies raised funds in the second quarter of 2024, compared to 230 fintech companies.
The value of VC deals across the Europe fell sharply last year, almost halving in value compared to 2022 amid a tough macroeconomic environment. But a recent report from Pitchbook also suggests the continent’s VC market is entering a period of recovery.
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