AI startups attracted 25% of VC funding in Europe

Investments in Europe are on the way for less than a yearbut this would undermine the fact that European AIs are improving.

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

For the senior partner of Balderton Capital James Wise, the most important takeaway is that “you can raise hundreds of millions of euros, even billions of euros, as an early AI company if you have the technology in Europe, as you can in the US”

This contradicts what he sees as a “false narrative” around Europe: Collectively, Europe’s AI industry has doubled in just four years, to $508 billion. According to the new figures, this group now represents about 15% of the total technology sector by value, up from 12% three years ago.

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

“We’re still just adopting the US market, we’re still dependent, but it’s not like there’s nothing going on here. It’s a very interesting environment,” Wise told TechCrunch.

This may not be news to TechCrunch readers who are already familiar with European AI stars such as Mistral AI and Photoroomand newcomers like it Dottxt. What is not expected, however, is Dealroom’s finding that 349,000 people were employed by AI companies in Europe this year, an increase of 168% from 2020.

This may sound surprising, since most AI teams are on the small side; but for Wise, this fits the concept of his latest book, “The Early Years: Why we all become entrepreneurs.” Wise said: “You will see the growth of hundreds of small, high-performing companies, instead of one large, medium-sized company.”

There is also a snowball effect, as AI companies make others profitable.

“In our CTO survey, 93% of the companies we work with say AI tools have significantly changed the way they work in the past year,” Wise said. Among these, some have reported that their engineering teams are now producing twice as much, while others are seeing an impact on other projects – saving 20% ​​on operational costs.

All of this leads Wise to think that the adoption of AI will continue to grow. Will this be good news for the AI ​​sector in Europe? Perhaps, even Wise and his colleagues now think that “there is no longer a field of AI.” This could make the same data worthless next year.