SeedBlink Blog

In the first quarter of 2025, European venture capital funding held steady, continuing the stable trend since the broader market reset in 2022. While deal activity remained consistent, the fundraising side got off to a slower-than-usual start, pointing to potential challenges for the rest of the year.

Now, let’s take a moment to look at the detailed breakdown of key data points and developments from Q1, including regional performance, sector trends, and the evolving role of early-stage and late-stage investments.

European fundraising overview in Q1 2025

In Q1 2025, Europe’s venture funding stayed at $12.6B, showing no change from the previous quarter and year-over-year comparisons. Funding levels in the region have remained between $10 and $16B per quarter since the 2022 downturn, with recent quarters on the lower end.

Source: Europe’s VC Funding Q1 2025 - Crunchbase

European venture activity remains stronger than in pre-pandemic years, with 2023 and 2024 both outperforming 2020 and earlier. In Q1 2025, Europe accounted for 11% of global venture capital, down from 16% in 2024.

European VC funding in Q1 2025

VC fundraising in Europe got off to a slow start in Q1 2025, with only €2.3 billion raised across 24 funds, setting the year on track to fall well below 2024’s totals. This segment tends to be uneven early in the year, and large fund closes can influence numbers, so Q1 results may not reflect the full-year trend.

Source: European Venture Report Q1 by Pitchbook

Regionally, DACH led fundraising in Q1, followed by the UK & Ireland and France & Benelux. Three of the top 10 largest fund closes happened in the UK, and nearly 70% of all closed funds came from emerging players, including six first-time managers, showing us continued interest in new venture entrants.

Source: European Venture Report Q1 by Pitchbook

Meanwhile, global venture returns are recovering but still negative on a one-year basis, and continue to lag behind other private asset classes over the mid-to-long term, possibly weighing on capital commitments as 2025 unfolds.

VC deal activity in Q1 2025

In Q1 2025, venture capital deal value in Europe reached €16.7 billion, putting it on track for a projected 10.8% year-over-year increase. Although the deal count was relatively low at just 2,433, some deals from Q1 will likely be added retroactively. Despite global economic uncertainty, VC dealmaking in Europe has held steady, mirroring the resilience seen in European public markets.

Source: European Venture Report Q1 by Pitchbook

Top 3 European regions in VC deals

In Q1 2025, France & Benelux recorded the weakest VC deal value performance among European regions, bringing in just €2.3B, a pace that suggests a steep 26.3% year-over-year drop. Most of this funding came from France, with €1.6 billion in deals, a quarter of which were AI-related.

Despite a few notable deals like Alice & Bob (€100M in cybersecurity), and Flowdesk (€100M in crypto), the region has struggled to maintain momentum compared to others.

Source: European Venture Report Q1 by Pitchbook

Meanwhile, the DACH region is on track for a more modest 5.2% decline, and the UK & Ireland are trending positively, with a projected 12.4% annual increase. While France & Benelux still play a role in Europe’s VC landscape, their share has been gradually shrinking, reflecting shifting investor attention to faster-growing markets.

Top 3 industries in VC deals

On the sector front, AI and ML took the top spot in Q1 2025, surpassing SaaS for the first time, accounting for €4.6B of all VC deal value. This marks a significant change for the vertical, which has continued to steadily grow, from ranking 6th in 2015 to now leading the pack.

SaaS, which has been a consistent top-three performer since 2015, ranked second, followed by fintech in third, maintaining its long-standing presence in the top tier.

Source: European Venture Report Q1 by Pitchbook

Life sciences also showed strength, finishing fourth with €2.5B in investment, pointing to a potential 20% year-over-year increase. Meanwhile, cleantech, which peaked in 2023, dropped to seventh, showing signs of investor rotation into faster-growing sectors like AI.

Women backing more women in venture

Additionally, female angel investors continued to support female-founded companies in 2024, participating in 25% of all VC deals involving women-led startups. While this marked a decline from the 2022 peak of nearly one-third, it remained above the baseline set in 2021, highlighting the continued role of women backing women in venture capital.

Even as overall deal volume and active female investor numbers dropped to their lowest since 2018, female angels remained a key part of early-stage funding, particularly for companies at critical growth stages.

Source: European All In: Female Founders in the VC Ecosystem

This continued involvement is especially important in a landscape where female founders still represent less than 25% of the European VC market. Despite that gap, female-led startups secured over €10B in funding in 2024, reaching their third-highest annual total.

However, there are still some structural challenges. Women make up just 15% of decision-makers at large VC firms, and female angels themselves faced a pullback in risk appetite last year. Yet, with female-founded companies contributing to a record 21.5% of all exits in Europe, the momentum from successful outcomes could help fuel renewed interest and greater investment in women-led companies moving forward.

Source: European All In: Female Founders in the VC Ecosystem

Expectations for Q2 2025

CEE - becoming the rising star in Europe

Central and Eastern Europe (CEE) has emerged as one of the fastest-growing innovation ecosystems in Europe, reaching a combined enterprise value of €243B in 2025. This represents a 15.5x growth over the last decade, more than double the European average.

Source: Central and Eastern European Startups - Dealroom

Despite historically limited access to capital, the region has produced 57 unicorns, 80% of which received VC or growth funding at some stage, according to the same report by Dealroom. Countries like Poland, Estonia, and Ukraine have led the charge, while a new generation of startups is emerging.

Rising stars like FLOW X (automation and analytics), DRUID (AI-driven enterprise software), and .lumen (assistive technology for the visually impaired) are gaining traction and recently raised rounds on SeedBlink.

See how .lumen raised €1M in just one day.

Explore how this assistive tech startup accelerated its mission to empower the visually impaired with smart glasses, powered by fast, smart financing on SeedBlink.

Read the .lumen case study.

The CEE region is also becoming a critical player in defence and dual-use technology. Over 100 startups in this space are active, many contributing directly to Ukraine’s defense efforts.

More interest in DefenceTech

In 2024, venture capital investment in European Defence Technology startups hit a record high of nearly $626M, driven largely by geopolitical tensions and growing interest in technologies like drones and autonomous systems. Geographically, Germany led European funding in 2024, overtaking the UK for the first time, with Munich emerging as the top city hub.

Source: DefenceTech Report - Dealroom x NATO Innovation Fund

Early 2025 activity is off to a slow start, but the interest in European DefenseTech continues to pick up as geopolitical tensions rise and the U.S. signals a reduced role in supporting Ukraine. With countries like Germany increasing military spending, public defense stocks have surged, and the private investment world is starting to respond.

Investors and VCs are reporting a "vibe shift" toward defense, with more discussions among LPs and venture groups. This growing awareness is reflected in conversations and early signals of capital interest, particularly in response to the urgent need for Europe to build its own defense capabilities.

The influence of AI continues to grow

AI’s global influence on venture capital is stronger than ever, now accounting for 20% of all deals worldwide. While the U.S. continues to lead the charge, securing over half of global AI venture deals in Q1’25, Europe is holding its own.

In early 2025, Europe and Asia were neck and neck in terms of AI venture activity, each accounting for a similar share of global AI deals. This places Europe firmly among the top global hubs for AI investment, just behind the United States.

Source: State of Venture Q1’25 Report

European early-stage investments in Q1

In the first quarter of 2025, early-stage startups in Europe raised $5.4B across more than 280 deals, reflecting a steady flow of funding despite a slight dip in deal count compared to previous quarters. Investment levels were relatively stable, though slightly below the Q2 2024 peak, and on par with the last two quarters.

Source: Europe’s VC Funding Q1 2025 - Crunchbase

In Q1 2025, European seed investment totaled $1.6B across approximately 850 deals. While the funding amount held relatively steady compared to previous quarters, the number of deals continued a gradual downward trend that’s been ongoing since Q1 2024.

Source: Europe’s VC Funding Q1 2025 - Crunchbase

Despite this, seed activity remains strong by historical standards, and totals may rise slightly as late-reported deals are added. While early-stage interest still exists, the declining number of seed deals suggests a more cautious approach from investors at the beginning of the startup pipeline.

For Series A rounds, the most notable round came from London’s Verdiva Bio ($411M), which raised Europe’s biggest ever Series A rounds. Another round worth mentioning is the Series A round from Sweden’s Windward Bio ($200M) and the Series B from Stockholm-based Neko Health ($260M)

While the number of deals has gradually declined since early 2024, the strong dollar volumes show continued investor confidence in promising early-stage European startups.

European late-stage investments in Q1

In Q1 2025, Europe saw about $5.6B invested across more than 80 late-stage and tech-growth deals, a slight increase from the previous quarter but still below the Q2 2024 peak of nearly $8B. The number of deals remained relatively stable over the past year, hovering around 80–100 per quarter.

The major funding rounds in Q1 came from U.K.-based companies, including Google-backed Isomorphic Labs ($600M) and payments platform Rapyd ($500M). Outside the U.K., Berlin’s Amboss ($259M) and Barcelona’s TravelPerk ($200M) also secured large rounds.

Find the right investors and financing option for your round

If you want to connect with VC funds or check out other active investors in the region, check out SeedBlink’s European VC Network list covering venture capital funds from SEE, DACH, Benelux, and others.

Want to get a larger ticket from several angel investors combined? Consider more flexible funding options for your next round, such as SeedBlink's syndicate infrastructure with its rolling facility that allows continuous fundraising.