European Venture Funding Reaches Four-Year High

Venture funding for European startups reached its strongest quarter in four years during Q2, according to Crunchbase data. Startups in the region collectively raised $24 billion, a rise of about one-third quarter-over-quarter and two-thirds higher than the $14.4 billion raised in Q2 2025.

The United Kingdom saw a significant increase in startup funding, raising over $10 billion in Q2. This marked the UK's third-largest funding quarter on record. European startup M&A activity also gained momentum from Q1 into Q2, even as public market exits remained subdued.

Large funding rounds notably contributed to the growth. Four companies secured over $1 billion in venture funding in the last quarter, accounting for 25% of all regional startup investments. These included AI-focused companies such as Alphabet-owned Isomorphic Labs, green steel producer Stegra, robotics firm Neura Robotics, and AI lab Ineffable Intelligence.

For the first half of 2026, funding to European startups increased by 50% year-over-year to a total of $42 billion. However, this figure remains below the peak of H1 2021, when European VC funding reached $60 billion. Deal counts, particularly at the seed stage, declined last quarter, while late-stage rounds saw a modest increase.

The UK widened its lead in venture funding, raising $10.4 billion. Germany followed as Europe's second-largest startup market with $3.2 billion, and France was third with $2.4 billion. Funding for Europe's AI-focused companies surpassed $10 billion in Q2, the largest quarterly amount to date.