Europe’s tech ecosystem gains momentum

“European tech is back in the game.” This statement summarises the findings of the Titans of Tech: Europe’s Technology Renaissance report published by international investment bank GP Bullhound in July 2025. According to the report:

• The European tech ecosystem continues to grow in global value
• Megarounds (investments exceeding $50 million) are rebounding after a post-pandemic decline
• Europe is emerging as a leading hub for AI innovation

Partner Alon Kuperman and Director Alex Jakima of Bullhound Capital presented the key findings of the report at the 2025 Luxembourg Venture Days. Figures are reported in the original currency used by GP Bullhound.

Growing number of European unicorns

This positive outlook is reflected in the rise of high-value startups across the continent. The study reveals that the number of European unicorns – startups with a valuation of over $1 billion – keeps growing and has multiplied by 11 since 2015. Despite macroeconomic uncertainty, 17 new unicorns emerged between May 2024 and May 2025, with a combined valuation of $34 billion – three more than in the previous year. In February 2025, Spotify became the first European unicorn since SAP to reach a valuation of $100 billion.

The origins of Europe’s 331 unicorns are highly diverse. The United Kingdom and Israel are the leading unicorn hubs, followed by France, Germany, Sweden and Spain.

Driving AI innovation

Alongside unicorn growth, Europe is carving out a leadership role in artificial intelligence. The Titans of Tech report highlights Europe’s new role as a pioneer in the development of artificial intelligence. European AI businesses have raised nearly €20 billion over the past 12 months. GP Bullhound speaks about a “funding frenzy” for AI companies and expects this trend to continue.

We have become much more aware of Europe’s need to have more technological independence – and we clearly have the brain power to achieve it.
Alex Jakima, Bullhound Capital

Investments happen in companies engaged in all segments of the AI value chain, with the development of AI infrastructure leading the way. Companies like Mistral AI, Poolside and Ismophoric Labs have raised megarounds, securing funding primarily for product development and technological research.

This paves the way for increased technological sovereignty in Europe. Mr Jakima sees two main reasons for this development. “We have become much more aware of Europe’s need to have more technological independence – and we clearly have the brain power to achieve it,” he says. New funding provided by both public and private investors creates new opportunities for transforming brilliant academic research into successful businesses.

Increasing investments in dual-use technologies

Another field that sees growing investment is dual-use and defence technologies. European companies have raised over €2 billion in increasingly large funding rounds in the second half of 2024, which is 2.4 times more than the same period the year before. EU, NATO and national funding programmes that foster technological innovation in defence are driving this trend.

Looking ahead

With strong investor confidence and a surge in AI and defence innovation, Europe is positioning itself as a global tech powerhouse. Luxembourg, with its dynamic startup scene and strong financial sector, is well-positioned to benefit from these developments.

Photo credit: Luxinnovation/Shine