European VC Funding Drops To Lowest Quarter In 4 Years, Despite Uptick For German Startups 

Venture funding to European startups reached $10 billion in Q3 2024 — the lowest quarter since the third quarter of 2020, Crunchbase data shows.

Startup funding to the continent fell dramatically: 36% quarter over quarter and 39% year over year. And of the three largest countries for startup funding in Europe, Germany was the only one to show a quarter-over-quarter and year-over-year increase.

While Europe’s Q3 funding decline is significant, it’s worth noting that venture investment since the start of the current VC downturn has fluctuated — between $12 billion at its lowest prior to this quarter, and close to $17 billion at its highest. Funding could well pick up again in the fourth quarter.

In Q3, late-stage funding fell the most — by more than 50% year over year. There was also a pullback at seed, by 18% year over year. Early-stage funding to European startups declined 12% year over year.

Table of Contents

• Leading countries
• European late-stage slowed
• Early-stage funding
• Seed pullback?
• A growing competitive market
• Crunchbase Pro list
• Related reading
• Methodology
• Glossary of funding terms

Leading countries

Funding for startups in the U.K., the leading country for venture investment in Europe, fell 43% year over year to $3.2 billion, Crunchbase data shows.

Funding to Germany-based startups grew by more than a third to $2.4 billion last quarter, making the country the second-largest country for venture funding in Europe in Q3.

France, which is more often the second-largest startup market in Europe, slowed to $1.4 billion invested last quarter.

“Europe is really a grouping of many smaller markets,” Teddie Wardi, a managing director at Insight Partners in New York who was previously at European funds Atomico and Dawn Capital, said in an interview. Outside of the continent, companies tend to think of Europe as one big region, when in fact investors need to approach Europe market by market, he said.

European late-stage slowed

Late-stage funding to European startups in the third quarter reached $4.2 billion across more than 70 rounds, Crunchbase data shows. That means late-stage funding was down 57% year over year.

Notable late-stage fundings went to:

• Berlin-based defense tech company Helsing, which raised a $488 million Series C led by General Catalyst;
• London-based women’s health app Flo Health, which raised a $201 million Series C funding led by General Atlantic;
• Munich-based smart fitness company Egym, which landed a $200 million Series G funding led by private equity firms L Catterton and Meritech Capital Partners; and
• Paris-based online digital health insurance provider Alan, which raised a $193 million Series F round led by Belfius Bank.

Early-stage funding

Early-stage funding to European startups last quarter reached $4.5 billion across just over 290 funding rounds. These include:

• Paris-based atomic energy company Newcleo raised a $151 million Series A;
• ESG compliance service company Osapiens, based in Mannheim, Germany, raised a $120 million Series B funding led by Goldman Sachs Alternatives; and
• Munich-based Marvel Fusion, a laser fusion energy company, raised a $70 million Series B led by HV Capital.

Three health tech companies also raised large early-stage rounds:

• London-based cancer treatment biotech startup Myricx Bio raised a $114 million Series A led by Abingworth and Novo Holdings;
• Belgium-based cancer treatment biotech PanTera raised a $110 million Series A led by EQT Life Sciences; and
• Vicebio, a London-based startup developing vaccines for respiratory viruses, raised a $100 million Series B led by TCG Crossover.

Seed pullback?

European seed-stage funding reached $1.5 billion across 800 rounds last quarter. That’s down from $1.8 billion in Q3 2023.

Still, it’s too early to say definitively if there is a funding slowdown at this stage, as seed rounds typically continue to be added to the Crunchbase dataset after the quarter closes.

A growing competitive market

Prior to 2020, European quarterly startup funding peaked at $11 billion. While funding is the lowest we have seen in four years, funding to European startups in 2024 to date is still well above pre-pandemic funding.

Despite the slower funding environment, “markets are more competitive than ever,” said Wardi, noting he has seen European startups expand quite quickly into other European countries as well as to the U.S.

Startups need to move quickly, otherwise someone else could take that opportunity, he said.

In software, European startups compete on a global stage. “In most categories of software, it’s harder and harder to build local winners as it’s really a global marketplace,” Wardi said. “Customers have very similar needs anywhere in the world, and they don’t really care that much about where the software they buy comes from, as long as it’s best in class.”

Crunchbase Pro list

• Funding To European Startups In 2024

Related reading

• Defense Tech Startup Helsing Raises at $5.4B Valuation
• Flo Health Lands $200M As Women’s Health Funding Holds Strong
• Global Funding Slowed In Q3, Even As AI Continued To Lead
• North American Startup Funding Weakened In Q3 As Largest Deal Took Longer To Close
• Asia Venture Funding Hits 10-Year Low In Q3

Methodology

The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported is as of Oct. 2, 2024.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

Please note that all funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of funding terms

We have made a change to how we include corporate funding rounds in our reporting as of January 2023. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round.

Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million.

Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)

Illustration: Dom Guzman