Funding to European startups rose in Q2, reaching close to $16 billion. Overall, funding was up 31% quarter over quarter and 17% year over year, based on an analysis of Crunchbase data.

Both early and late-stage funding was up — with a notable increase in late-stage funding.

For the first time in a decade, quarterly funding to European startups was higher than in Asia. According to a recent Crunchbase report, Asia-based startups suffered their worst quarter since the final quarter of 2015, not helped by the tension between the U.S. and China.

Table of contents

• AI led in Europe
• Late-stage grew
• Early-stage up
• Seed tailed
• M&A in Paris
• Good signals
• Methodology
• Glossary of funding terms

Across Europe, the UK was the leading market with $6.7 billion and France the second largest with $2.9 billion in funding — both markets up year over year. The third largest market, Germany, was down this past quarter with $1.8 billion going to startups there.

AI led in Europe

AI was the leading industry in Europe with $3.3 billion invested in Q2. Large rounds went to London-based automated driving company Wayve, Paris-based foundation model Mistral AI, and Cologne-based language translation platform DeepL.

The second largest sector was financial services, totaling $3 billion. Three U.K.-based companies raised large rounds: lending platforms Abound and GB Bank as well as digital bank Monzo.

Sustainability was the third largest in Europe with $2.5 billion invested as renewable energy companies raised mega-rounds north of $100 million.

Late-stage grew

Late-stage funding reached $7.5 billion across more than 100 rounds. Funding was up the most quarter over quarter and year over year, but it was not the highest quarter in the last year.

Ever since funding began to slow down a couple years ago, quarterly totals have fluctuated as late-stage funding surged or fell. This is true for the past five quarters, charted below:

Early-stage up

Early-stage funding reached $6.5 billion across just over 300 funding rounds. Series B funding showed the largest increase year to year at this stage.

Seed tailed

Seed stage funding reached $1.8 billion, across 900 rounds, down from $2.3 billion in Q2 2023.

M&A in Paris

Paris-based startups generated some of the largest acquisitions this past quarter.

London-based PE firm Bridgepoint acquired a majority stake in Paris-based employee hub LumApps for $650 million. Social network BeReal, also from Paris, was acquired by mobile gaming company Voodoo for just over $500 million. And not the largest deal, but of interest in the AI sector, was Belgium-based AI legal drafting service Henchman, purchased by U.S.-based LexisNexis for $160 million.

Good signals

Three companies from Europe joined the unicorn board in Q2, down from five in Q1. They include Paris-based business forecasting service Pigment, Berlin-based auto parts retailer Autodoc, and London-based no-code app developer Builder.ai. European unicorn companies number 208 in total on The Crunchbase Unicorn Board.

And in good news for European venture, fintech unicorn Revolut posted its 2023 earnings showing strong revenue growth — 95% year over year. The company reported $2.2 billion in revenue for 2023 and a profit of $545 million alongside 12 million new customers. Revolut was last valued at $33 billion in 2021.

Overall, European startups posted a pretty good quarter, showing an increase in late-stage funding to mature startups. We also saw the most prominent sector, AI, take the lead for funding in Europe, and a positive sign of substantial revenue growth from one of the region’s most highly valued private companies, Revolut.

Methodology

The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported is as of July 7, 2024.

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. Crunchbase 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 Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of funding terms

We have made a change to how we include corporate funding rounds in our reporting as of January 2023. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round.

Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase 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. Crunchbase 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 “Series [Letter]” naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million.

Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)

Illustration: Dom Guzman