European venture capital funding hit $17.6 billion in Q1 2026, marking a nearly 30% increase year over year and the second consecutive quarter of growth, according to Crunchbase data. The surge was predominantly fueled by AI companies, which for the first time accounted for over half of all venture funding in Europe that quarter. Despite this growth in capital, the number of deals fell sharply by 40%, with notable decreases in seed and early-stage funding rounds. The UK and France saw year-over-year funding growth, raising $7.4 billion and $2.9 billion respectively, while Germany’s funding remained flat. Late-stage funding nearly doubled compared to the previous year, highlighting investor confidence in more mature startups across diverse sectors such as AI hardware, fintech, and energy. The largest rounds included billion-dollar investments in AI pioneers like Advanced Machine Intelligence and Nscale, underscoring Europe’s expanding leadership in AI frontier technologies.
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