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European start-ups are experiencing a surge of investor interest, with valuations for artificial intelligence, fintech and defence groups jumping as venture capital firms battle to fund the continent’s hottest new companies.
AI voice start-up ElevenLabs is discussing a sale of employees’ shares at a more than $6bn valuation, a doubling of the company’s value from January when it last raised funds, according to people familiar with the matter.
Groups including Swedish “vibe-coding” start-up Lovable and German software firm n8n have also experienced a flurry of investor interest in recent weeks. French AI group Mistral is in talks to raise new money that would value it at about $10bn from investors that include Dutch chipmaking equipment supplier ASML, almost double its level last year, according to people close to the discussions.
It comes as investors globally are rushing to back fast-growing AI companies amid a boom in the cutting-edge technology. This has led to a series of huge fundraising deals this year, particularly in the US, with OpenAI in the process of raising $40bn from investors led by SoftBank, while Anthropic this week closed an expanded $13bn round, valuing it at $170bn.
“Fomo is definitely back,” said Alex Lim, a general partner at the VC firm IVP. “You’ve started to see large growth rounds in Europe that we haven’t seen for the last few years.”
European VC investment has bucked off three years of contractions and could reach the highest ever total this year excluding the boom years of 2021 and 2022, according to data from Dealroom. It said European VC deals are on pace to rise 3 to 4 per cent in 2025 to reach $57bn, roughly the same total as 2023.
This rise has seen some AI companies field inbound investment offers, while other tech start-ups have expanded their fundraising rounds or brought forward their next one to take advantage of the increased activity.
Last week the FT reported that Lovable had received interest that would value the company at more than $4bn, double the price at which it raised funding just weeks ago.
Germany’s n8n has seen its valuation surge to more than $2bn, up from €300mn in March, in a new round set to be led by Accel, people familiar with the matter said. Amsterdam-based Framer, a no-code website builder start-up, has also raised new funding at a $2bn valuation in recent weeks in a deal led by Meritech and Atomico.
Defence tech groups have also attracted attention, buoyed by European governments’ commitments to increase their defence spending in the face of the US’s shift away from the continent.
In Germany, drone start-up Quantum Systems is discussing a fundraiser at up to a €3bn valuation, according to people familiar with the matter, while the UK’s Cambridge Aerospace has raised $100mn, that would value it at around $400mn.
Meanwhile, UK fintech group Revolut this week allowed its employees to sell some shares at a $75bn valuation, nearly double its level last year.
“We’re in the midst of a seismic technological shift globally . . . the UK & Europe is fortunate to be home to some of the companies that will be part of that wave,” said James Wise, a partner at London-based Balderton Capital.
But European AI companies remain far behind US leaders in terms of both fundraising and commercialisation. OpenAI is one of the most valuable private tech companies in the world with a $300bn valuation, and is currently talking to investors about a secondary share sale that would value it at $500bn.
The rising valuations and surge in activity reflect the size of the opportunity, according to General Catalyst’s head of Europe Jeannette zu Fürstenberg.
“We are definitely slower,” she said, but “Europe is really catching on to this and is trying to find meaningful ways to capture some of that productivity.”
ElevenLabs, Mistral, ASML and Quantum Systems declined to comment. n8n did not respond to a request for comment.
Additional reporting by George Hammond in San Francisco and Melissa Heikkilä in London