Equity fundraising for startups in Europe climbed to €12.8B in Q1 2025 — a 13% rise from Q4 and 5% more than Q1 last year. The surge was largely powered by healthtech startups, which secured five of the ten largest funding rounds during the period.
The biggest deal went to Isomorphic Labs, a London-based AI drug discovery firm spun out of Google DeepMind, which raised $600M. AI agents also drew strong investor interest, with 61 startups in the category securing funding — second only to medtech’s 67 deals.
Debt funding edged up to €4B but remained far below the €14.3B raised in Q1 2024. The top debt round this year was Finn’s €1B raise. The German car subscription service also topped Sifted’s fastest-growing startup list in Germany last year.
Europe also welcomed four new unicorns in Q1:
- Tines (cybersecurity automation, Ireland)
- Neko Health (body scanning, Sweden)
- Loft Orbital (spacetech, France/USA)
- Sygnum (crypto banking, Switzerland)
Fewer Rounds, Bigger Tickets
Despite the rise in total investment, deal count continued to slide. Only 1,235 rounds were announced in Q1 — down 15% YoY — marking the third straight quarter below 1,250. However, the median deal size jumped 36% to €3M. The average also grew 21%, from €10.4M to €12.6M.
This reflects a clear capital concentration trend — fewer companies are raising funds, but the rounds are larger. VCs like HV Capital (10 deals), Creandum (8), and General Catalyst (7) were notably more active than in early 2024. Much of this capital is flowing into AI companies that need costly compute infrastructure.
In the U.S., the same pattern is emerging. As The French Tech Journal‘s Chris O’Brien noted, big AI rounds are masking a drop in the total number of funded startups.
Larger European deals — those over €50M and €100M — increased slightly, while rounds in the €10M–25M range grew 12% YoY. Rounds above €10M rose 5%. Series A rounds averaged €16M in Q1, up 42% from last year. Smaller deal brackets (€0–1M and €1–2M) dropped sharply, by 35% and 32% respectively.
Healthtech Surges While Climate Tech Slips
Healthtech funding soared to €3.7B — nearly matching the sector’s full H1 2024 figure of €4.3B. Drug discovery companies led the charge, including Isomorphic Labs and Verdiva Bio. The latter raised Europe’s second-largest Series A ever to develop a competitor to Ozempic.
In contrast, climate tech fell to fourth place in terms of equity funding. The biggest round was Germany-based Green Flexibility’s €400M raise for large-scale battery storage.
Deeptech’s share of deal volume rose, while fintech and consumer startups saw modest declines.
AI Agents and Data Centres Draw Capital
AI agent startups had a breakout quarter. Sixty-one companies raised a combined €827M. Notably, 61% of these startups were launched before 2024 — signaling growing maturity in the space.
Data center startups also gained traction. European companies in this sector raised €608M in Q1. The largest deal was UK-based Ori’s $140M round in February. These centers are essential to support AI infrastructure, with Amazon, Meta, Microsoft, and Google collectively set to invest $300B in the space this year.
Crypto made a modest comeback, raising €385M in Q1. The industry benefited from a renewed investor focus, boosted by Donald Trump’s return to the White House and renewed interest in stablecoins.
UK Leads, Ireland Rises, France Falls Behind
UK startups raised the most equity in Q1 — €3.76B — nearly doubling Germany’s €1.96B. Factoring in debt narrows the gap between the two.
Ireland stood out with €600M in equity raised — nearly its total for all of 2024. Tines’ €120M Series C led the charge and made the company Ireland’s ninth unicorn.
France, meanwhile, saw deal activity fall. Only 123 French startups raised funding in Q1 — a 30% drop YoY and far below the 545 peak in Q1 2022. However, the median round size in France rose sharply, showing VCs’ increasing preference for larger bets on fewer firms.
Spain matched France in total deals, continuing strong momentum from late 2024. It now appears to be the fourth-largest tech scene in Europe after the UK, France, and Germany — surpassing Sweden, Switzerland, and the Netherlands.
The Netherlands, meanwhile, saw deal count fall 11% YoY, continuing its downward trend.
