Introduction
Over the past decade, Europe’s entrepreneurial landscape has shifted dramatically, and change is being brought by Artificial Intelligence (AI) and Deep Tech. In 2024, AI-first startups raised $110 billion in venture capital globally, according to Dealroom’s AI Summit 2025 report. This marks a 62% year-on-year increase, despite a drop in overall tech funding. Europe is not beyond this time, e.g, European Deep Tech startups raised $15.1 billion more than any other sector, including fintech and healthcare. Companies like Mistral and DeepL led the charge in generative AI, securing over $1 billion, while quantum pioneers Quantinuum and Riverlane are shaping the future of computing.
This marks a 62% year-on-year increase, despite a drop in overall tech funding. Europe is not beyond this time, e.g, European Deep Tech startups raised $15.1 billion more than any other sector, including fintech and healthcare. Companies like Mistral and DeepL led the charge in generative AI, securing over $1 billion, while quantum pioneers Quantinuum and Riverlane are shaping the future of computing.
In this blog, we’ll explore how Europe’s AI and Deep Tech ecosystem is growing, where the most exciting breakthroughs are happening. And what does that mean for founders, investors, and the future of tech in Europe?
Deep Tech and AI Revolution Across Europe
Europe is heading toward a deep tech and AI revolution, and the change is already taking shape across the continent. Governments are supporting innovation, ecosystems are growing, and investors are steadily backing technologies like generative AI, quantum computing, and advanced robotics.
Some countries like the UK, Germany, France, and Spain are the ones leading this change. According to the latest numbers, the UK attracted the most Deep Tech VC funding in Europe in 2024, reaching $4.2 billion well ahead of France and Germany. France came second with $3 billion but saw a significant slowdown compared to previous years, while Germany raised $2.7 billion, showing strong growth at 37% year-over-year. The country is leading in industrial AI, robotics, and research across mobility and manufacturing.
France’s AI companies in deep tech have raised over $3.23 billion in the last 10 years, including a record $1.29 billion in 2024, with $158 million already raised in 2025 according to the reports. The country is expanding its AI startup ecosystem and funding deep tech research, particularly in generative AI and sovereign technologies. (Tracxn – AI in Deep Tech, France). Spain has launched a €300 million public initiative to support deep tech transfer through the EIF, helping bring disruptive research to market as per EIF News. The country is becoming a leader in AI applications for healthcare, including diagnostics, hospital automation, and patient monitoring.
Similarly, countries like the Netherlands, Portugal, Austria, and Sweden are becoming key players in Europe’s deep tech and AI ecosystem. The Netherlands is focusing heavily on AI-powered logistics and smart supply chains. For example, automation and real-time optimization are helping businesses reduce waste and boost efficiency.
Portugal is building a strong presence in AI-driven fintech and cybersecurity. The government is actively supporting the initiatives and helping the startup grow focused on innovations in secure digital services. Austria, meanwhile, is investing in deep tech startups working on manufacturing, automation, and green technologies.
Moreover, Sweden continues to lead in ethical AI and healthtech. It was recently ranked as one of the most attractive countries in Europe for launching AI businesses, thanks to its strong digital infrastructure and progressive policy environment. However, in terms of funding, Sweden saw the steepest drop among top countries in 2024, with a 71% decline year-over-year. In contrast, neighbouring Finland posted the strongest growth in Europe, with an impressive 78% increase in deep tech VC funding as mentioned according to Dealroom’s Deep Tech VC Funding in Europe, 2024 report.
Why Deep Tech and AI Matter More Than Ever
How AI and Deep Tech Tackle Global Problems
Investors are putting more money into AI and Deep Tech because these technologies aren’t just trends they're for the future. The world is facing many challenges currently and these complex problems can be possible only through innovation in AI and Deep Tech. For example, Deep Tech can play a vital role in addressing current issues like climate change, healthcare, cybersecurity, resource scarcity, and inequality.
Better Returns Than Regular Startups
Deep tech investments have more returns than regular startups. Unlike regular startups that spend a large part of their money on advertising, Deep Tech companies use their funding to build powerful infrastructure like satellites, battery factories, or advanced chip labs. These massive investments make their technology harder to copy and help them stand out in the market. For example, according to Dealroom, traditional software startups often spend 20–40% of their funding on advertising, while Deep Tech companies invest that money into building advanced infrastructure. Hence, Deep Tech startups often deliver better long-term returns than traditional software companies.
Deep Tech as a Key to Sustainability
Deep Tech startups are important not just for innovation, but also for building a more sustainable, low-carbon economy. They often need strong support from both public and private investors because they spend a lot on research. Some people think these startups are too risky or slow, but reports from McKinsey and Dealroom show that’s not true. Deep Tech startups can raise money just as fast as others and give better returns over time.
Deep Tech: Independence and Innovation for Europe
Deep Tech is becoming the backbone of Europe’s innovation and independence. It will drive the next big breakthroughs from autonomous systems to space technology. If Europe increases its defense spending to 3.5% of GDP, about €61 billion each year could go into Deep Tech, creating a €245 billion market impact annually. This investment won’t just boost defense it will support the whole Deep Tech sector and help Europe stay competitive and self-reliant in critical technologies.
With AI and Deep Tech growing quickly across Europe, now is the right time for founders who want to solve real problems to start building. These technologies aren’t just creating new companies; they're shaping the future of healthcare, energy, security, and more. For investors, it’s not just about finding the next big startup. It’s about supporting the technologies that can make Europe more independent and competitive.
Conlusion
AI and Deep Tech are transforming Europe, opening new opportunities for founders and investors. These technologies are tackling major challenges while attracting record investment. With strong support and increasing momentum, Europe can emerge as a global leader in this space.
.svg)