American Capital Influx Pushes Up Valuations, European Startups Achieve Record Funding Scale

[Global Finance News] According to reports from Bloomberg and other foreign media, driven by a surge of capital into the U.S., the European startup funding market is experiencing a boom, with funding amounts and valuation levels rising significantly, especially in the artificial intelligence sector.

(Image source: Bloomberg)

Jan Oberhauser, founder of the Berlin-based software startup n8n, said that last summer they received 14 letters of intent for funding, mostly from U.S. investors. Oberhauser noted that U.S. investors tend to make decisions more decisively, offer higher valuations, and have more founder-friendly terms.

Data from PitchBook shows that from 2024 to 2025, the median funding size for European startups will increase by 32%, the largest growth since 2020. U.S. investors’ participation in European funding rounds has risen to 20%, doubling from ten years ago. American venture capital firms like Lightspeed, Andreessen Horowitz, and Thrive Capital are actively investing in Europe, with some providing funding even before companies officially launch their funding rounds, quickly boosting project valuations.

AI startups are the main beneficiaries of this funding boom. Paris-based AI startup AMI, led by Yann LeCun, completed Europe’s largest seed round on record, raising $1 billion with a valuation of $3.5 billion; Swedish AI company Lovable, founded three years ago, is valued at $6.6 billion; legal AI firm Legora, founded in 2023, is valued at $5.5 billion. Firms like Accel are actively participating in these funding rounds, with partner Ben Fletcher relocating from San Francisco to London to strengthen their European market presence.

Data shows that by 2025, the average valuation of late-stage European startups will reach €1.4 billion, a new high, up 224% from 2024. Several newly established startups that have not yet launched products have already surpassed $1 billion in valuation.

Julien Codorniou, partner at UK venture firm 20VC, and Matt Miller, former head of Sequoia Europe, stated that the influx of U.S. capital has significantly increased competition in the European venture market. Providing funding alone is no longer enough to secure high-quality projects; institutions need to leverage community, resources, brand, and other added values to enhance competitiveness. Meanwhile, exit channels in Europe remain a focus, with long-term exit capability becoming a key consideration for investors.