Klarna’s long-awaited IPO provided a standout moment for Europe’s venture ecosystem in Q3, but the more noteworthy signal may be what’s happening earlier in the funding pipeline.
While late-stage startup investment in Europe remains relatively muted, early-stage funding has quietly become Europe’s engine of resilience — helping sustain overall funding levels even as global capital continues to concentrate around massive AI rounds in the U.S., Crunchbase data shows.
All told, European startups pulled in $13.1 billion across more than 1,000 deals last quarter, flat quarter over quarter but up 22% year over year, per Crunchbase data. Early-stage investment accounted for roughly 60% of that total, buoyed by strong activity in deep tech, biotech and AI applications.
This contrasts with North America, which has seen a surge of megarounds of $500 million or more, largely into AI-related companies, over the past four quarters. North American companies raised 68% of global funding in Q3, up 10 percentage points from a year ago, with two-thirds invested in later-stage financings.
Table of contents
Klarna debuts and strong M&A
Sweden-based Klarna went public on the New York Stock Exchange in Q3 at a value of $15.1 billion, marking the completion of one of the most-anticipated European debuts in recent years. Still, while Klarna’s listing price was well above its most recent private valuation at $6.7 billion in 2022, it was still far below its 2021 valuation of $45.5 billion.
Five European companies were also acquired for close to or more than a billion dollars each last quarter, including Sweden-based enterprise knowledge platform Sana, which was purchased by Workday, and Germany-based conversational AI platform Cognigy, acquired by Nice Systems. Other billion-dollar startup exits out of Europe last quarter were in healthcare — Vicebio and OrganOx — and Calastone, in asset management.
AI stepped up
Close to 40% of European funding was invested in AI-related startups last quarter, totaling $5.2 billion, per Crunchbase data. That was up from $2 billion in Q3 2024.
The large fundraisers in the space were Paris-based frontier model company Mistral AI, which raised $2 billion, and London-based Nscale, a 1-year-old data center and cloud provider that raised $1.1 billion. (Within a week in early October, Nscale raised another $433 million from Nvidia, Nokia and Dell, among others.)
Other large rounds in AI last quarter were raised by Sweden-based vibe coding startup Lovable, London-based accounts payable company Xelix, and Switzerland drone and robotics operations platform Auterion.
Late stage
Around $5.4 billion was invested last quarter across 75 deals into Europe startups at growth stage, per Crunchbase data. That represents around 9% of global late-stage venture funding, the smallest proportion compared to other funding stages. The
Other late-stage fundings went to London-based smartphone and device maker Nothing, Netherlands-based website design Framer, and Italy-based embedded device security platform Exein.
Early stage up
Early-stage funding in Q3 was up year over year by 31%, with $6.1 billion invested across more than 257 funding rounds. European funding represented 20% of global early-stage funding.
Early-stage rounds also went to Finland-based IQM Quantum Computers, Belgium-based Aerospacelab, and U.K.-based material science company CuspAI.
Seed
European seed funding totaled $1.7 billion in Q3 across 745 seed rounds, representing 18% of global seed funding.
Large seed rounds were raised in energy, AI, biotech, fintech, autonomous driving and robotics, among other sectors.
Robust early stage
Early-stage funding to European startups picked up in Q3 with large rounds in deeptech, biotech and AI applications across many European cities.
Europe’s early-stage funding represents around 20% of global venture funding, while funding lags at the later stages, coming in at 9% of global funding.
So while Europe’s startups haven’t produced the splashy growth figures of their North American counterparts, the region has now delivered several sequential quarters of steady funding, not to mention resilient early-stage investment and strong exits in Q3. In fact, four of the nine companies acquired globally for more than $1 billion last quarter hail from Europe. As Europe and the U.S. come closer together, with many European founders launching in the U.S. market earlier, the question is: Will Europe continue to create those standout $10 billion-plus companies as it did most recently with Klarna?
Methodology
The data contained in this report comes directly from Crunchbase, and is based on reported data. Data is as of Oct. 6, 2025.
Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.
Please note that all funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.
Glossary of funding terms
Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.
Early-stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.
Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round.
Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)
Illustration: Dom Guzman
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