The best AI deals in Europe this year

Startups in general continue to face significant headwinds when it comes to raising venture capital funding. According to Crunchbase, Q2 was only a modest improvement over the weak points of the previous two quarters.

But there is one category that still seems to have opening doors — and checks: artificial intelligence.

In the US, AI has accounted for almost 30 deals worth more than $100 million so far in 2024, making it the global leader now. Europe, however, is not far behind: our research shows that since August, Europe has seen 14 investments of $100 million or more in AI companies, with one company taking on two investments.

AI is a major driver of the European long-tail startup ecosystem. In total, PitchBook data shows that in 2024, the region saw over 1,700 AI startup funding rounds.

The largest AI startups, those that build basic models, continue to exert the most gravitational force when it comes to funding, in part because AI remains an expensive area to develop. Sources tell us that Mistral AI, which has already raised more than $1 billion in net investment this year, is apparently raising funds again.

Mistral is headquartered in Paris, a city that has really established itself as a hub for AI development in Europe, particularly in the generative AI category. When you consider that some promising emerging markets, such as India, receive only a fraction of the AI funding that more developed markets receive, it will be interesting to see whether Paris can maintain and capitalize on this leadership position—or, alternatively, how the balance of power (and money) might shift.

Whether it’s autonomous driving technology, LLM startups, or entities that also have hardware components, there are four main reasons why AI is attracting major investments:

The computing power required to train and run queries using AI models is enormous.
Artificial intelligence startups are racing to recruit talented people.
In some cases, AI companies will need money to pay royalties for all the IP they use to train and run their models.
Investors grappling with the vast amounts of growth capital (and pressure from LPs to deploy it) are having to find places to put their money. Watching the hyperscale Big Tech giants, investors see large AI companies as big and potentially lucrative investments.

Here is a summary of the biggest rounds in European AI this year, which can be compared to the most important categories in AI right now:

Wayve: $1 billion

Competing with the likes of Tesla, GM, Intel, and Alphabet requires a lot of money, and that’s exactly what Wayve is raising. In May, the Cambridge, England-based startup closed a $1.05 billion funding round to double down on its self-driving technology, making it the largest single funding round for an AI company in the region. Like Intel’s Mobileye, Wayve sells its AI technology to various automakers and OEMs rather than manufacturing the vehicles themselves, which theoretically gives it a broader business funnel as well as a greater operational focus for the startup.

But unlike many other self-driving car companies, Wayve has “stepped away” from relying primarily on expensive lidar technology. The company is already rolling out services; one customer is British grocery chain Asda. “We started the company seven years ago to build embodied AI,” Wayve co-founder and CEO Alex Kendall told TechCrunch. “We focused on building the technology. Last year, things really started to click.” Its investors include SoftBank, Nvidia, Microsoft, and Meta’s AI chief Yann LeCun.

Mistral: $650 million and $431 million

Mistral has become one of the main players building large language models – the foundation of generative AI applications – not only in Europe but also worldwide. One of its unique selling points is its open-source acceptance, which theoretically makes its technology more customizable and therefore friendly to enterprises and developers.

Mistral’s funding history has been very “turbulent” so far: it launched with a $113 million seed round just a year ago. This year, it has raised over $1 billion in total, first in a $431 million tranche and then in a second round of $650 million (final closing values) from a distinguished set of VC, tech and financial investors, including DST, Andreessen Horowitz, Lightspeed Venture Partners, Microsoft, Salesforce, BNP Paribas, CMA CGM and General Catalyst. Combining these rounds, it has raised the most funding of any AI startup in Europe this year. And if our sources are correct, it is now working on raising even more.

Helsing: $484 million

While one of the first applications of AI was defense, geopolitical events have brought renewed attention to defense tech and AI startups.

Helsing was founded in Germany, and its European roots have been key to its development. It is seen as a “local” solution, its existence signifying greater resilience in the European defence economy, helping countries in the region to be less dependent on third parties outside it. It has announced a series of agreements with specific countries, including Estonia and Germany, and has a number of others it does not disclose.

Until now, Helsing has focused primarily on software, with one of its key missions being building AI services that can connect and work with legacy infrastructure to improve defense systems, increase weapons capabilities, and provide better battlefield analytics for decision-making. Ukraine, and the Russian threat in particular, has been a major driver of its growth.

“Ukraine used technology to defend against a full-scale Russian invasion, and I think the fact that we were able to help there, deploy our technology, and execute the mission that we set out to do three and a half years ago, to use AI to protect our democracies, was a big driver for us,” Helsing co-CEO Gundbert Scherf told TechCrunch. With $487 million raised in July, it is also likely to get into hardware. Investors include General Catalyst, Prima Materia, Elad Gil, Accel, Saab, Lightspeed, Plural, and Greenoaks.

Poolside: $400 million

Poolside is focused primarily on developers, specifically on building AI tools that help them accelerate software development. While many startups are certainly courting developers, investors are betting that the founders will have a special talent for product-market fit. CEO Jason Warner was CTO at GitHub and led engineering at Heroku and Canonical. The other co-founder, CTO Eiso Kant, previously founded Athenian, which built a series of tools for developers to help them optimize the way they build and work.

Like many AI startups in Europe, Poolside is based in Paris, and early investors included BCV; early-stage specialists like London’s Air Street, Abstraction, and Scribble Ventures; New Wave and Frst from France; and Bpifrance, Felicis, Point Nine, and Redpoint. This latest $400 million round (which may not have closed or at least been disclosed yet) is reportedly co-led by BCV and DST.

DeepL: $320 million

There are a number of companies—both startups and major platform players like Google and Microsoft—that offer translation and writing tools, but Germany’s DeepL believes its AI-based approach is simply better. It’s also taking a slightly different approach, focusing not on consumers but on the B2B/enterprise opportunities in the market.

It now has about 100,000 business customers and announced a $320 million funding round in May of this year, betting it can grow that number. Its investors include ICONIQ Growth, Teachers’ Venture Growth, IVP, Atomico, and WiL.

H: $220 million

The H stands for “heady,” which is what the AI market is all about right now. It’s also the name of one company that backs that up. This startup, which was formerly known as Holistic AI before taking a mysterious turn and shortening its name to H, raised $220 million in a seed round in May.

The company hasn’t launched any products yet, but when it does, it looks like it’ll focus on one of the other wildly popular applications for AI right now: AI agents. Specifically, it’s focused on “pioneering action models to increase worker productivity,” according to its site. “AI’s mind-blowing capabilities to automate tasks and decision-making.” There’s no word yet on which verticals, which models, when it might launch, what it might support, or what roles it’s looking to fill. What’s more, three of the company’s five co-founders have already left the company. Intoxicating, indeed.

Flo Health: $200 million

London-based Flo Health describes itself as the first “purely digital” (no hardware/wearables) women’s health app, which surpassed a $1 billion valuation when it raised $200 million from General Atlantic earlier this year. It currently focuses on fertility and period tracking, but has ambitions to expand to older and younger users and more health categories. The company says it has 380 million total users to date, with 70 million of those being monthly active users.

Pigment: $145 million

Another Parisian startup! Pigment works in the enterprise software space—specifically enterprise resource planning for finance teams. Like Flo Health, it’s not an AI startup per se, but it leans into it for its functionality. As such, it’s part of a growing collection of AI applications that are bolstering predictions that AI will eventually become an integral part of all our digital services. Its $145 million funding round earlier this year, which came less than a year after its previous funding round, gave Pigment a valuation of more than $780 million.