SA国际传媒

Funding to European startups reached $52 billion in 2023, down 39% year over year from $86 billion invested in 2022, SA国际传媒 data shows.

However, Europe’s share of the venture capital ecosystem has increased since 2021. In 2022, the year the downturn settled in, Europe declined by a smaller percentage when compared to North America and Asia.

鈥淲e’ve gained influence in the past six to seven years,鈥� said , a London-based partner at who has been with the firm since 2011 and witnessed the growth of the European venture ecosystem.

While valuations have come down since 2021, digital transformation of companies and services has continued.

Table of contents

• AI revolution
• Quarterly findings
• Late-stage reset
• Early stage holds up
• Seed funding
• Closing out 2023
• Methodology
• Glossary of funding terms

Based on an analysis of data, Europe鈥檚 deepest cuts year over year were seen in late-stage funding. Late stage almost halved in 2023, while seed and early-stage funding were each down 30% year over year.

In Europe, 2023 funding was at its lowest since 2021. By contrast, 2023 funding to North American and Asian startups dipped to amounts seen before 2018 and 2016, respectively.

AI revolution

AI startups in Europe raised $5.8 billion last year, which includes funding to foundation model companies , based in Germany, and France-based . Other large rounds were invested in France-based AI code developer , German-based translation AI , and London-based generative video company .

Formidable talent in AI has come from Europe, specifically the team from , which was acquired by Google in 2014.

鈥淕enerative AI has driven a lot of investment in new technology,鈥� said Botteri. 鈥淓very single software company is incorporating generative AI in their code.鈥�

Quarterly findings

Funding to European startups in the fourth quarter of 2023 reached $10.6 billion, down 23% year over year and 35% quarter over quarter 鈥� the lowest funding quarter since Q3 2020.

Funding counts at early and late stage in Q4 were down around 30%聽 year over year. Seed funding counts typically increase over time as smaller seed fundings are added after the close of a quarter.

Late-stage reset

Late-stage funding in Q4 reached $4 billion, the lowest quarterly amount since Q3 2020. The third quarter of 2023, however, saw an increase in funding to battery technology and manufacturing.

Early stage holds up

Early-stage funding has held steady since the initial quarterly decline in Q3 2022. Funding to early-stage startups in Q4 2023 reached $5 billion, flat quarter over quarter and year over year.

A greater proportion of dollars was invested at Series A compared to Series B.

Seed

Funding to seed startups reached $1.6 billion in Q4 2023, flat quarter over quarter and down a third year over year.

Closing out 2023

Europe is better placed to compete in this era of tech than it was a decade ago, with a more established venture ecosystem, deep talent and strong connections to the U.S. markets. Europe has played a leading role in fintech, health care and hardware. And the race around AI technology is just getting started.

Methodology

The data contained in this report comes directly from SA国际传媒, and is based on reported data. Data reported is as of Jan. 3, 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. SA国际传媒 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 SA国际传媒 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. SA国际传媒 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. SA国际传媒 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 鈥淪eries [Letter]鈥� 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 鈥渧enture鈥� round. (So basically, any round from the previously defined stages.)