European technology investment has staged a sharp recovery in the first half of 2026, with venture capital and private equity funding climbing 28% compared with the same period last year, according to new data from Dealroom. The resurgence has been driven primarily by artificial intelligence and clean energy startups, analysts say.
Total investment across the EU and UK reached EUR 48.2 billion in the six months to June, reversing two consecutive quarters of decline. AI-related companies accounted for roughly a third of that figure, while green technology firms attracted a record EUR 12.7 billion.
“What we are seeing is a flight to substance,” said Martina Kohl, senior analyst at European Venture Intelligence. “After the correction of 2024 and early 2025, investors are backing companies with defensible technology and clear paths to revenue rather than growth-at-all-costs models.”
The strongest performances came from Germany, which recorded a 41% year-on-year increase in deal value, and the Netherlands, where deep tech investment more than doubled. The UK remained the largest single market by volume, capturing 31% of all European deals.
Several high-profile funding rounds have signalled renewed confidence. London-based AI infrastructure firm Nebula raised EUR 800 million in May, while Munich’s Helia Energy secured EUR 450 million for its next-generation solar panel manufacturing facility. Both companies cited supportive regulatory environments and growing corporate demand as key drivers.
However, industry observers caution that the rebound remains uneven. Early-stage funding has recovered more quickly than late-stage rounds, and consumer-facing technology firms continue to struggle. Exit activity via IPOs remains subdued, with only seven European tech companies listing publicly in 2026 so far.
“The recovery is real but narrow,” noted Kohl. “We need to see broader participation across sectors and stages before we can call this a full market revival.”
Policymakers in Brussels are keen to maintain momentum. The European Commission is expected to announce new measures in September aimed at reducing regulatory friction for deep tech startups and expanding the European Innovation Council’s budget. Whether that proves enough to sustain the current trajectory remains an open question, but for now, the continent’s technology sector is heading in the right direction.