The influx of US venture capital into Europe’s AI startup scene is raising questions about the role and competitiveness of local investors.
Why it matters: The increasing presence of US investors in European AI deals could lead to larger rounds and higher valuations, but it also presents challenges for local VCs trying to secure a foothold in this rapidly growing sector.
By the numbers:
- In the first half of 2025, the number of US VCs making at least two AI investments in Europe rose by 73% compared to the same period last year.
- Eight of the top 10 AI funding rounds in Europe this year featured three or more US investors, a 60% increase from the same period last year.
- US accelerator Y Combinator has made the most pre-seed/seed AI investments in Europe this year with 13.
US investors are more likely to lead European growth stage rounds but have been increasingly active at the early stages too.
What they’re saying:
- “Our early rounds were all led by US VCs because we couldn’t raise money in Europe,” says Victor Riparbelli, CEO of London-based AI video maker Synthesia. “European investors tend to look at businesses through spreadsheets. In Silicon Valley, it’s about vision, teams, and markets that don’t yet exist.”
- “Europe’s AI application layer is quietly taking the lead,” says Laura McGinnis, principal at Balderton Capital. “And US accelerators are expanding slots and actively doing roadshows across London, Berlin, Paris, and Amsterdam, drawn by a wave of breakout AI companies.”
The other side: Some European VCs see the increased competition from US investors as a positive sign of the ecosystem’s maturation and an opportunity to benefit through partial secondary deals and increased liquidity.
The bottom line: While US investors are becoming increasingly dominant in European AI dealmaking, local VCs can still leverage their competitive advantage at the earliest stages where the real returns are made. The influx of foreign capital ultimately presents both challenges and opportunities for Europe’s AI startup ecosystem.