European AI startups raised approximately $8 billion in funding during 2024, as the continent’s tech ecosystem gains momentum ahead of the upcoming Artificial Intelligence Action Summit in Paris.
European AI startups raise $8 billion in 2024 funding
The summit will see heads of state and global tech leaders converge in France to potentially announce significant investments and agreements, especially regarding the safety and environmental impact of artificial intelligence. In preparation for the summit, early-stage venture capital firm Galion.exe, growth investment firm Revaia, and advisory firm Chausson Partners collaborated on the French AI Report, highlighting current trends in the sector.
AI companies represented around 20% of all venture capital (VC) funding in Europe in 2024, with 70% of capital raised being allocated to seed to Series B rounds. The United Kingdom led the way in attracting VC funding, followed by France and Germany, while the Nordics also demonstrated notable success relative to their size. The trend indicates a likelihood of continued rapid growth as many AI startups are still at early stages.
As AI companies expand, they increasingly attract international investors, with U.S. VC firms investing about 50% of the capital in AI companies at Series C rounds and beyond. Specifically in France, Minister Delegate for Artificial Intelligence and Digital Technologies Clara Chappaz noted the existence of over 750 startups that have generated around 35,000 jobs across various sectors. There are also around 2,000 scientists and 600 doctoral students dedicated to AI research in the country.
The French AI Report analyzed the top 400 AI startups in France, identifying emerging leaders in the industry. While some companies like Mistral AI and Poolside are already recognized, many startups are focusing on niche applications rather than developing next-generation foundational models. For instance, companies such as Linkup and Kestra are optimizing data workflows and pipelines, while ZML enhances inference performance, and Dust develops agents to analyze large datasets and boost productivity.
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Prominent sectors for AI applications in France include health and climate technologies. Notable players such as Owkin and its spin-off Bioptimus are leading the healthtech sector, concentrating on imaging tools, drug discovery, and improving medical treatments. Meanwhile, climate startups are leveraging AI for agritech, carbon management, and new materials development, with companies like Altrove emerging as significant contributors.
Amidst this growth, industry leaders advocate for Europe not to lag behind the advancements in AI seen in the United States and China. Verena Pausder, chairwoman of the Startup Association, emphasized the need for Europe to act decisively against the competition posed by major U.S. players. She stated, “The global race for AI leadership is accelerating. Europe can rise to this challenge – with unity and determination,” and highlighted the importance of mobilizing capital and ensuring fair competition.
Maya Noël, CEO of France Digitale, echoed these sentiments, asserting that Europe possesses the necessary talent and infrastructure to lead in AI, urging for more investment in researchers and entrepreneurs. The associations involved have called for increased capital investment, a pan-European funding program, and standardized regulations to facilitate growth in the AI sector.
While several European companies have gained recognition, such as Mistral AI, Germany’s Aleph Alpha, DeepL, and Munich’s Helsing, concerns remain regarding the widening gap with U.S. counterparts. In 2023, a partnership between OpenAI, Oracle, and SoftBank announced a combined investment of $500 billion to boost AI development in the U.S. Concurrently, Chinese startup DeepSeek recently unveiled a competitive AI model developed at a significantly lower cost, further intensifying the global competition.
Featured image credit: Steve Johnson/Unsplash
