Despite the downturn, AI startups in Europe raised $5.8 billion in 2023, with significant investments in companies like Aleph Alpha and Mistral AI. Funding to European startups in Q4 2023 reached $10.6 billion, down 23% year over year and 35% quarter over quarter. Late-stage funding in Q4 was $4 billion, the lowest since Q3 2020, while early-stage funding remained steady at $5 billion. Seed funding reached $1.6 billion in Q4 2023, flat quarter over quarter but down a third year over year.
Key takeaways:
- Funding to European startups reached $52 billion in 2023, a 39% decrease from the previous year, with the most significant cuts seen in late-stage funding.
- Despite the decrease in funding, Europe's share of the venture capital ecosystem has increased since 2021, and the region has gained influence in the global venture ecosystem over the past six to seven years.
- AI startups in Europe raised $5.8 billion in 2023, with significant investments in companies like Aleph Alpha, Mistral AI, Poolside, DeepL, and Synthesia.
- Despite the downturn, Europe is better positioned to compete in the tech era than a decade ago, with a more established venture ecosystem, deep talent, and strong connections to the U.S. markets.