AI startups have attracted 25% of Europe’s VC funding

Venture funding is going to Europe for exactly one yearhowever, this may confuse the fact that European AI startups are thriving.

According to VC firm Balderton Capital and Dealroom, 25% of VC funding in the region – about $13.7 billion – went to AI startups this year, compared to 15% four years ago, resulting in several new unicorns. Poolside and Wave.

For James Wise, senior partner at Balderton Capital, the most important takeaway is that “If you have a breakthrough technology in Europe, you can raise hundreds of millions of euros, even billions of euros, as a very early-stage AI company. USA”

This counters what he sees as a “relatively negative narrative” in Europe: Collectively, European AI companies have doubled in value to $508 billion in just four years. According to these new figures, the category now accounts for about 15% of the value of the entire tech sector, up from 12% three years ago.

This means that early or later stage funding is available for AI startups, although it may not always come from Europe itself. In addition, American AI companies also see Europe as a talent pool to tap into.

“We are still probably a subsidiary of the US market, we still rely on it, but nothing is happening here. It’s a really vibrant ecosystem,” Wise told TechCrunch.

This may not be news to TechCrunch readers already familiar with the rising stars of European AI. Mistral AI and Photo roomnewcomers also like it Dottxt. Less expected, however, is that Dealroom found that 349,000 people were employed by AI companies in Europe this year, an increase of 168% since 2020.

This may seem surprising because many AI teams are smaller; but for Wise, it is consistent with the thesis of his latest book, “Start-up Century: Why we all become entrepreneurs and how to make it work for everyone.” “Rather than one large, medium-yielding company, you’ll see the growth of hundreds of small, highly-yielding companies,” says Wise.

There is also a snowball effect as AI companies make others more productive.

“In our CTO survey, 93% of companies we work with say generative AI tools have significantly changed their workflow in the past year,” Wise said. Some of these say engineering teams are now twice as productive, while others say it’s impacting other functions – saving up to 20% on average in operating costs.

All of this leads Wise to believe that the adoption of AI will continue to grow. Will this be good news for Europe’s AI sector? Perhaps Wise and his colleagues now think “There is no longer an AI sector”. This would make similar data potentially meaningless next year.

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