Europe’s startup engine is humming again. More than ten venture-backed companies across the continent have crossed the $1 billion valuation mark this year, signaling a selective but unmistakable rebound in late-stage financing and a shift toward sectors where Europe’s research depth and regulatory tailwinds matter.
The new cohort isn’t a carbon copy of the last boom. Mega-rounds remain rarer and more structured, yet capital is concentrating around startups with clear moats in AI, dual-use aerospace and defense, privacy-preserving compute, and next-generation health. Dealroom, PitchBook, and Atomico’s State of European Tech have all pointed to this rotation in sector leadership.
Where the herd is growing
AI is the headline driver. Design-forward website builder Framer secured a $2 billion valuation on the back of product-led growth and an enterprise push. Conversational automation firm Parloa joined the club at $1 billion, while workflow specialist Tines crossed $1.1 billion as it moved beyond security into broader engineering and ops. Early-stage standout Lovable, an AI coding upstart from Sweden, leapt to a reported $1.8 billion valuation in its first year of life.
Deep tech and privacy are equally potent. Finland’s IQM reached unicorn status by coupling quantum hardware with a cloud platform, reflecting Europe’s strength in physics and compute. France’s Zama, focused on homomorphic encryption, vaulted above $1 billion by proving demand for privacy-preserving AI—an area aligned with the continent’s regulatory posture.
Dual-use aerospace and defense are having a moment, propelled by procurement and strategic investors. Germany’s Quantum Systems became a unicorn as it scaled autonomous drones with backing from Hensoldt and Airbus Defense and Space. Portugal’s Tekever confirmed a valuation north of £1 billion, supported by investors including the NATO Innovation Fund and Baillie Gifford, and laid out a £400 million development plan in the U.K. Isar Aerospace, another German standout, hit unicorn territory via a sizable convertible, underscoring investor comfort with non-traditional late-stage structures in capital-intensive sectors.
Healthcare and consumer also broke through. London-based Isomorphic Labs raised $600 million to help rewire drug discovery with AI. Swedish preventative health company Neko Health reached about $1.8 billion on momentum for its full-body scanning clinics. On the biotech front, Verdiva Bio’s giant Series A instantly minted a unicorn as it advanced an oral GLP-1 candidate. Even culture-tech made the cut: Mubi joined the club at $1 billion, proving that curated streaming can still command growth capital. In climate, U.K.-based Fuse Energy became one of the year’s stealth unicorns, as reported by The Times.
Why now: capital, policy and procurement
Three forces are at work. First, late-stage capital has returned with discipline. Growth funds and crossover investors are writing checks, but they’re demanding efficient growth, clear unit economics, and, increasingly, near-term profitability paths. PitchBook data shows fewer blockbuster rounds, but steadier activity clustered around market leaders.
Second, Europe’s policy architecture is finally a tailwind. The NATO Innovation Fund has catalyzed dual-use investing, while the European Investment Bank continues to anchor deep-tech credit and equity programs. Strategic investors—from defense primes to cloud and semiconductor players—are more active than in prior cycles, often joining or leading rounds in frontier tech.
Third, deal design has evolved. Convertibles, milestone-based financing, and inside-led extensions are common, letting companies raise sizable sums without headline-grabbing valuations. Isar Aerospace’s convertible and several insider-led rounds in AI exemplify this pragmatism.
Geography: the U.K., Germany and the Nordics lead
Unicorn creation remains concentrated but more geographically diverse. The U.K. produced AI-first leaders such as Isomorphic Labs and saw energy and media entries with Fuse Energy and Mubi. Germany stacked wins in aerospace and AI with Isar Aerospace, Quantum Systems, and Parloa, leveraging industrial depth and strong university pipelines.
The Nordics continue to punch above their weight: IQM in Finland and Sweden’s Neko Health and Lovable reflect a region adept at converting research into product. France’s Zama highlights Paris’s expanding cryptography and AI safety talent base, while Portugal’s Tekever illustrates how Iberia’s dual-use ecosystem is maturing.
Caveats and what to watch next
Not all unicorn rounds are created equal. Some carry structure, investor-friendly terms, or heavy secondary components. A unicorn valuation is not an exit; companies still need durable gross margins, predictable go-to-market motion, and increasingly, a route to profitability. The exit window remains patchy, so secondary liquidity and M&A will matter.
Still, the pipeline looks strong. Expect more unicorns in AI infrastructure and agents, autonomy and defense software, privacy-preserving compute, quantum-adjacent tools, and energy flexibility. With procurement-driven demand and world-class research spinning out of institutions like the Technical University of Munich, Europe’s new unicorn factory looks leaner, more technical, and better aligned to long-term value than in the last hype cycle.