Mega rounds for Energy and Fintech have propelled European tech investment to nearly $30 billion in the first half of 2024, according to new data released by Dealroom. This is up 12% compared to the same time last year, signalling a strong return to growth for the European tech ecosystem.

Late-stage investment has benefited from a surge in activity in both sectors, up 8% year-on-year to over $5B, and breakout funding (stage B to C) has experienced its highest investment total in six quarters at $6.2B. So far this year, 1450 companies across Europe have raised $2M in what is promising to be the third-most active year for VC investment in Europe ever, behind only 2021 and 2022.

Fintech and Energy continue dominance

Fintech was the second biggest sector for European tech behind Energy, with 230 companies raising $5.4B. This was propelled by mega rounds for affordable loans platform Abound (£400M), neobank Monzo ($190M), business planning platform Pigment ($145M) and embedded finance provider Cloover ($114M). Half of all fintech funding in Europe went to UK businesses.

Energy continues to dominate European tech, taking in $5.6 billion in H1 2024 as the most funded sector so far this year. This continues the trend from 2023 when the increase in investment for startups enabling the energy transition meant Energy was the top-funded industry in Europe every quarter.

In particular, hydrogen companies raised some of the biggest investment rounds in Q2 including Paris-based HysetCo, which raised €200M to decarbonise urban transport with its hydrogen taxis. Brussels-based Tree Energy Solutions (TES), which is focused on making green energy through electric natural gas derived from green hydrogen, also raised €140 million.

AI riding high

AI investments now make up 18% of all the funding flowing across Europe, up from 6.9% only 10 years ago. Generative AI makes up 10% of all European VC funding so far this year, whilst GenAI model makers and GenAI applications are also driving investment across the continent.

The top five AI investment rounds include:

• Wayve – $1.1B Series C
• Mistral AI – $503M Series B
• DeepL – $300M Late VC
• H Company – $200M Seed + Convertible note
• Cognigy – $100M Series C

Geneva enjoys investment surge

The UK has collected the most VC investment so far in 2024, raising $9.4 billion in total. London-based companies raised the majority of this funding, $6.8 billion, with investment into the city up 30% compared to 2023. Cambridge also made the top 10 European cities for funding, with $664.6M raised by the city’s tech companies so far, up 83% on 2023’s figures.

France ($4.3 billion) and Paris closely followed the UK and London, ($3.1 billion) thanks to the success of its AI companies. However, the biggest European tech success this year goes to Geneva which has already raised more funding in the first half of the year ($385.7M) compared to the whole of 2023 ($262M). Large funding rounds in the city include biopharma cancer treatment company iOnctura ($86.4M), financial services company Alpian ($83.7M) and neurological drug development company Neurosterix ($63M).

Sahar Meghani, Partner at Visionaries Club, said: “The UK’s fintech sector continues to be world-leading with Monzo picking up more funding this quarter and credit technology Abound also raising £400 million to boost its lending product. This is a clear example of how open banking and AI is helping to transform financial services and it’s likely we’ll see more fintech success stories using these technologies this year.”