Europe's Technology Investment Stream: Assessing Liquidity and Delivery

European Venture Capital: Modest Growth Amid Global Competition

In 2025, venture capital raised by European startups reached $58 billion, reflecting a modest 9% increase from the previous year. This growth rate is notably lower than North America's impressive 46% jump. A large share of European funding is non-dilutive, with initiatives such as the EU's EIC Accelerator providing startups with grants of up to €2.5 million in addition to equity support. Looking ahead, the Horizon Europe program is set to inject €175 billion into innovation between 2028 and 2034, though new hurdles to accessing these funds are already surfacing.

The Challenge of Public Listings

Last year, the number of technology companies going public in Europe dropped by 20%, totaling only 105 IPOs. The capital raised through these listings also declined by 10%, amounting to $17.3 billion. This points to a persistent gap in the region’s capital markets, where investors are now more focused on strong fundamentals, moving away from the previous era of easy access to public markets. The upcoming EU Listing Act, scheduled for 2026, is expected to address these issues by enhancing liquidity and competitiveness in European public markets.

Deep Tech and AI Take Center Stage

Investment trends are shifting in favor of deep tech, with artificial intelligence emerging as the most prominent sector for European startups for the first time.

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Trade Statistics

Fragmented Funding and Barriers to Scale

Despite these efforts, Europe has yet to match North America's dominance in venture capital. National initiatives, such as France’s €1.5 billion annual program and Germany’s €1 billion venture fund, illustrate a patchwork approach to capital deployment that has struggled to achieve scale.

Geopolitical and Regulatory Headwinds

Political and regulatory uncertainties continue to pose significant challenges. Access to the upcoming €175 billion Horizon Europe fund is increasingly limited by new rules restricting foreign participation. These tightening restrictions on research funding could undermine Europe’s ability to attract the international investment necessary to turn its deep tech pipeline into commercial success.