Analysis of the European venture capital ecosystem: investment, fundraising, exits, emerging sectors and the impact of the Iranian conflict on markets.
The European venture capital market closed 2025 with 66.2 billion euros invested, a growth of 5% year-on-year, consolidating the second consecutive year of recovery after the collapse of 47% since the peak of 2021. However, the aggregated numbers hide a more complex reality: the number of transactions fell for the fourth consecutive year to 8,626, the second lowest level in the last decade. Capital is concentrated in fewer and larger transactions.
AI becomes the dominant sector
Artificial intelligence absorbed 23.500 million euros — 35.5% of all capital deployed —, becoming for the first time the leading ecosystem sector. Within SaaS itself, there is a pronounced bifurcation: AI-native companies such as Palantir (+142%) or Sierra radically diverge from legacy SaaS platforms such as HubSpot (-51%) or Salesforce (-31%).
Fundraising at record lows
The raising of new funds was 12 billion euros, the lowest level in a decade. Only 148 funds were closed - the record low - and none exceeded 1 billion. The ratio between capital deployed and raised reached 5.5x, compared to 3.2x in 2024, which could result in a serious shortage of capital in 18-24 months if fundraising does not recover.
Defense tech and climate tech: sectors on the move
Defense tech grew 26% in the first half of the year, with Helsing reaching a valuation of 12 billion euros. Investment in autonomous systems rose 143% globally. Climate tech, on the other hand, fell from 32% to 15% of European funding in 2025, although the new energy context could reverse this trend. Europe maintains the global leadership in climate fundraising with 54% of the capital raised.
Outputs: nominal improvement, real weakness
The value of outflows reached 52,000-55,000 million euros, but Klarna's IPO of 12,700 million represents about a quarter of the total. Without Klarna, the value of exits would have fallen by 15.3% year-on-year. More than 85% of the exits occurred via takeover and only 2% via IPO, with negotiating power concentrated on corporate buyers — mostly Americans.
Spain: Dynamism Beyond Its Historical Potential
Spain raised 2.9 billion dollars in 2025, making it the sixth largest European country in terms of VC investment, with growth of 18% year-on-year. Southern Europe was the most dynamic with +26.3%, and Spain attracted 5.5% of the first international Serie A rounds. However, the country is still underweight: with 8-12 operating unicorns, it represents approximately 2-3% of the European total.
The Iran Conflict: A New Layer of Uncertainty
The military attacks of February 28, 2026 on Iran caused a 60-75% increase in European gas prices and the interruption of 20% of the global supply of oil passing through the Strait of Hormuz. For the VC ecosystem, the impact is channeled through higher operating costs for energy-intensive startups, potential change in the capital allocation of LPs, and an even more restricted exit market. Defense tech and energy efficiency technologies emerge as the sectors most directly benefited.
[→ Access the full analysis: European Venture Capital Market 2025-2026]
