Europe Posted Its Strongest Venture Funding Quarter In 4 Years As UK Gains, M&A Holds Up

deepmind — in Q2, Europe posted its strongest quarter in four years for venture funding, Crunchbase data shows. All told, Europe-based startups raised $24 billion in the just-ended quarter, up around a third quarter over quarter and two-thirds higher than the $14.4 billion raised in Q2 2025.

Within the region, U.K. startups gained significant share in Q2, raising more than $10 billion. That marked the third-largest funding quarter for the U.K. on record, and came in at less than $500 million below its peak quarter in 2021. European startup M&A activity also picked up in Q1 and continued that momentum in Q2, even as public-market exits stayed subdued. Table of contents Large rounds drive gains H1 2026 up 50% UK momentum builds By stage Looking ahead Methodology Glossary of funding terms Large rounds drive gains Four companies raised venture fundings of a billion dollars or more last quarter, accounting for 25% of all startup investment in the region in Q2, Crunchbase data shows. Those billion-dollar-plus rounds were raised by an AI-centric group: Alphabet-owned AI drug developer Isomorphic Labs, which was spun out of DeepMind; green steel production manufacturer Stegra; Neura Robotics, which is developing robots for home and industrial applications; and Ineffable Intelligence, an AI lab founded by former DeepMind researchers. However, most of the growth in funding year over year and quarter over quarter was driven by rounds of $100 million and over. The majority of funding — 65% — went to a group of 42 companies that raised rounds of $100 million-plus. Sectors that stood out for these companies include  biotech, quantum, financial services, AI labs, aerospace, semiconductor, robotics and energy. H1 2026 up 50% Funding to Europe-based startups in H1 was up 50% year over year to total $42 billion, Crunchbase data shows. Still, the region’s startup investment for the first half of the year remained well below the 2021 H1 peak, when VC funding in Europe totaled $60 billion. It’s also drastically lower than the $392 billion raised in North America’s record-setting H1, with that region’s funding up 158% year over year. Europe’s funding deal count subsided last quarter, but mostly at the seed stage. Late-stage rounds were up a bit, while early-stage deals dipped slightly year over year.