Reports published by Tech.eu this week paint a split picture of Europe's technology investment climate: a blockbuster funding round for one AI company, alongside data showing early-stage startups are struggling more than at any point in over a decade to raise follow-on capital.
French AI company Mistral closed a €3 billion Series D round, part of more than 70 European tech funding deals worth a combined €3.9 billion tracked in a single week, according to Tech.eu on September 11. The outlet described the round as pushing "sovereign AI into its next phase."
That same week, research from venture firm Antler, reported by Tech.eu on September 10, found that the share of European seed-funded startups that go on to raise a Series A round has fallen to 9.3% in 2023, down from 13.1% in 2022 and 23.3% between 2008 and 2019. The number of active pre-seed and seed investors has dropped 42% since 2022, and the number of new early-stage investors has fallen more than 45% over the same period, the research found. "Whilst everyone chases the headline-grabbing mega funding rounds, there are fewer and fewer investors backing new startups," Antler partner Christoph Klink said, according to Tech.eu. Restoring the Series A conversion rate to pre-2020 levels would require an additional $2.74 billion, the report estimated — equivalent to about 10% of all funding raised by what it calls Europe's rocketship unicorns.
Industry pushes for a larger EU role
Against that backdrop, industry group DIGITALEUROPE called this week for 25% of the European Union's proposed €2 trillion budget for 2028–2034 to be directed toward critical and digital technologies, Tech.eu reported on September 11. The group, which represents 134 corporate members and 45 national trade associations covering more than 56,000 businesses, also urged the EU to adopt a 32% electrification target by 2030 and a 50% share of electricity in final energy consumption by 2040. "Europe's energy bill is a wake-up call," said DIGITALEUROPE president Peter Weckesser, who is also executive vice-president and chief digital officer at Schneider Electric, adding that Europe cannot power tomorrow's factories without electrification. Director general Cecilia Bonefeld-Dahl argued that €2 trillion sounds large but is modest once spread across seven years and 27 countries. According to the group, Europe has spent an estimated €50 billion extra on fuel since the Strait of Hormuz crisis, and industrial electricity prices are roughly double those in the United States and 50% higher than in China. The group also asked for funding decisions on startups within 90 days and for the €450 billion European Competitiveness Fund to retain its €51.5 billion Digital Leadership window.
Why it matters
The contrast between a record-setting national champion and a shrinking base of early-stage investors is being cited by industry groups as evidence that Europe's tech ecosystem depends on a small number of large rounds rather than broad-based investment. Negotiations over the EU's 2028–2034 budget, which will determine whether DIGITALEUROPE's request is reflected in policy, are ongoing.