Europe’s merger and acquisition activity also experienced a boost in the first quarter of 2026, with that momentum continuing into Q2.

New data from Crunchbase has shown that in Q2 of 2026, European start-ups reported the strongest quarter in four years for venture funding.

The region’s start-ups raised roughly $24bn in Q2, with figures having risen by a third in quarter-on-quarter terms and standing two-thirds higher than the $14.4bn raised during the same period in 2025.

Europe’s merger and acquisition activity was also shown to be improving steadily. Despite public market exits remaining subdued, in Q1 mergers and acquisitions picked up, with the momentum continuing into the second quarter. 

The UK, in particular, was found to have had a successful second quarter for VC funding, as start-ups based in the country raised $10.4bn. This figure is not too far off the UK’s peak of $10.8bn in 2021 and also marks the third-largest funding quarter for the UK on record. 

Other countries with a strong start-up performance for the quarter include Germany, which trailed behind the UK with $3.2bn, France with $2.4bn and Sweden with $2bn. 

Early-stage funding reached $8.6bn across more than 250 start-ups in Europe last quarter, according to Crunchbase, whose data indicated that large Series A and Series B rounds were raised by London-based Isomorphic Labs, London’s AI self-learning lab Recursive, Germany’s fusion energy company Focused Energy, London’s semiconductor developer Fractile and London-based quantum processor provider QuantWare.

Late-stage funding for Europe-based organisations totalled $12.1bn in Q2, up 90pc year-over-year. Among the large Series C and D rounds were for German robotics developer Neura Robotics; the Netherlands’ Nearfield Instruments, which makes inspection tools for semiconductor manufacturing; UK quantum computing start-up Oxford Quantum Circuits; and Germany’s satellite launcher Isar Aerospace.

Notably, European seed funding totalled $3.2bn for the last quarter, with $1bn of that raised by a single organisation, Ineffable Intelligence, which is a UK-based AI start-up building a ‘superintelligence’ platform. It was founded by former Google DeepMind researcher David Silver.

Other notable seed funding rounds for the period include efforts made by Inherent, a London-based AI lab for science, Italy’s autonomous driving technology producer Niulinx and Stockholm-based defence tech company Swebal.

Crunchbase’s report said: “European start-up investment has now steadily increased since the fourth quarter of 2024, with increased momentum in the just-ended quarter, driven by larger rounds of $100m and over. 

“The region’s start-up ecosystem shows particular strength in deep tech and financial services, as well as the formation of new AI labs, and M&A activity has fuelled liquidity for the next batch of start-ups. Now the question remains – will it be enough to keep Europe competitive with the frontrunners, the US and China?”

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