The return of capital to Europe is real and goes by its own name
With 2025 at its equator, the new report of Sifted paints a fascinating picture: despite an 11.5% year-on-year drop in equity funding, the sentiment is different. Europe is not losing gas, it is reconfiguring its engine.
It's not a year for the euphoria of bloated unicorns. It is a year of strategic investment, of significant rounds in sectors where Europe has a real competitive advantage: defense, health, deeptech. The biggest deal equity didn't come from an app for sharing bikes or a fintech with a clean design, but from Helsing, a German technology defense startup, which raised an astronomical sum of €600 million led by Prima Materia, Daniel Ek's background (yes, the Spotify one).
The South Wakes Up, the North Reorganizes
The narrative of “traditional hubs” has changed. London and Paris are still on the podium, yes, but they show signs of containment. Paris, for example, sees its number of rounds fall, although those that take place are larger, especially in Series B and C. London retains volume, but loses some steam compared to a continent that is reactivated by other coordinates.
At the other extreme, Munich consolidates itself as the new center of gravity German. It has raised €1.6 billion in H1, just €348 million below Paris, and surpasses Berlin in raised capital despite having fewer rounds. The key is quality: sectors such as defense, energy and robotics have found their natural habitat there, with the Technical University of Munich and its accelerator Unternehmertum as axes of the new Bavarian dynamism.
Madrid and Barcelona their second-city complex is also being shaken. Madrid has doubled its number of rounds compared to H2 2024, and Barcelona recorded a growth of 31%. The change is cultural as well as financial:”Spanish founders are more ambitious than ever”, says Borja Solé Fauria, from Murphy AI. The valuation gap between capitals such as London and emerging hubs is beginning to close.
Berlin, for its part, has found its new north in artificial intelligence. 17.4% of all its rounds have been led by native AI startups, the highest proportion in Europe. On that front, Amsterdam (16.7%) and Paris (12.8%) follow closely behind.
The AI stays, the climate cools
2025 will be remembered as the year in which “agentic AI” —startups that automate services autonomously— stopped being theory and became a market reality. These startups raised €1.7 billion, growing by 26% year-on-year in the number of deals. It's no longer about building tools, but about offering the full service, transformed by AI. Europe understood this quickly.
By contrast, investment enthusiasm for climate has declined markedly. Climate tech funding fell by 40%, driven by the bankruptcy of stars like Northvolt and a global political turnaround that diminishes the green sector's momentum. But even here, the adjustment seems more like correction than abandonment.
Capital seeks substance
This semester's narrative is clear: investors are no longer pursuing easy brilliance, but rather long-term strength. This explains the rise of traditionally less “sexy” but more strategic sectors: defense, health, manufacturing. It also explains the entry on the scene of 13 new unicorns, many of them born in industrial or technical environments.
Meanwhile, big global funds are once again looking at Europe. In H1, 12 of the 20 biggest rounds they had American VCs as lead investors. But this time they don't come to dictate conditions, but to integrate into an ecosystem that begins to play by its own rules: less exuberance, more conviction.
Europe, with first and last name
What was once a blurry mass of “European ecosystem” is now fragmented into geographies with personality. Munich, Madrid, Berlin, Amsterdam, Dublin, even San Sebastian and Siegen, have their own names on the global innovation map.
It's not about competing to be the next Silicon Valley, but about building a different model: based on technique, resilience and real impact. In a world where speed overwhelms, Europe chooses precision.
And for the first time in a long time, that doesn't sound like a delay. It sounds like strategy.
