The energy transition is powering a recovery in European venture capital in the first quarter of 2024, according to Dealroom’s Europe Q1 report. European startups raised $13.7 billion in VC funding in Q1 2024, a 5% increase on the same period last year.

The increase in funding comes despite concerns in a global slowdown in funding to early stage companies. European VC is on track to be on a similar path to 2023 when the continent raised $59.1B in total, with the UK continuing to retain its crown as the leading country for VC investment. Over 500 companies raised rounds of more than $2M in the first months of the year, with later-stage funding proving particularly resilient – up 2.1X compared to Q1 2023.

Energy tech has overtaken fintech in Europe as the strongest sector, thanks to a number of mega investments in energy startups underlining how the journey to net zero is becoming a priority on the continent. Energy was the largest sector for deals in Europe, raising a total of $3.1B, for the fourth consecutive quarter.

‌This put Energy ahead of Health ($2.8B), Fintech ($2.8B), Transport ($1.7B) and Enterprise Software ($1.6B).

Sahar Meghani, Partner at Visionaries Club, commented on the trend:

“European tech had a brilliant first quarter, demonstrating the resilience across the ecosystem. It’s particularly encouraging to see that over 500 companies raised at least $2 million or more, showcasing the strong pipeline of startups who will scale up to build the next generation of category-defining companies. We’re bullish that Europe will continue this momentum into 2024.”

I‌mage: Karsten Würth on Unsplash