European mergers and acquisitions activity also saw improvement in the first quarter, with that momentum continuing into Q2.
New data from Crunchbase showed that in Q2 2026, European startups reported the strongest quarter in four years of financing. Regional startups rose to nearly $24bn in Q2, figures are up a third, quarter on quarter and two thirds over $14.4bn over the same period in 2025.
European integration and shopping activity has been shown to be improving steadily. Despite public market exits remaining small, in Q1 mergers and acquisitions increased, momentum continued into the second quarter.
The UK in particular was found to have a successful second quarter for VC funding, as startups based in the region raised $10.4bn. This figure is not far off the UK peak of $10.8bn in 2021 and marks the third largest quarter of UK funding on record.
Other top performers in the quarter included Germany, which followed the UK with $3.2bn, France with $2.4bn and Sweden with $2bn.
Early funding reached $8.6bn among more than 250 startups in Europe last quarter according to Crunchbase, whose data revealed that the largest Series A and Series B rounds were raised by the London-based. Isomorphic LabsLondon-based AI lab Recursive, German integrative energy company Focused Energy, London-based semiconductor developer Fractile and London-based quantum processor provider QuantWare.
The latest funding, for organizations based in Europe, reached $12.1bn in Q2, up 90pc year-on-year. Among the major rounds of the C and D series was a German robotics engineer Neura RoboticsNearfield Instruments of the Netherlands, which makes test equipment for semiconductor manufacturing, is a UK quantum computing startup Oxford Quantum Circuits and German satellite launcher Isar Aerospace.
Notably, European seed funding reached $3.2bn in the last quarter, with 1bn of that raised by one organisation, Unspeakable Intelligencewhich is a UK-based AI system that creates an ‘intelligence’ platform. It was founded by former Google DeepMind researcher David Silver.
Other notable seed funding rounds of this period include efforts by Inherent, a London-based AI science lab, Italian autonomous driving technology manufacturer Niulinx and Stockholm-based defense technology company Swebal.
A Crunchbase report said, “European startup investment has now grown steadily since the fourth quarter of 2024, with increased momentum in the quarter just ended, driven by large rounds of $100m and above.
“The region’s startup scene is showing some strength in deep technology and financial services and the creation of new AI labs and M&A activity has fueled the momentum of the next batch of startups. Now the question remains, will it be enough to keep Europe competitive with the frontrunners, the US and China?”
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