When Shamillah Bankiya, a partner at Dawn Capital, looks out on the European venture market, she sees a system that has reset, repriced and — crucially — retooled itself for the next upcycle. Her perch is credible: Dawn operates with more than $2 billion, backs B2B software from seed through Series C and counts more than 30 exits and a double-digit unicorn tally in its portfolio, including names like Collibra and Dataiku. Bankiya’s own focus includes data infrastructure, fintech and compliance-heavy marketplaces, including bets on Qogita and Fonoa.
Her message is simple: The European venture market isn’t broken; it’s maturing. The froth of the boom years has dissipated, but the ingredients for companies that can compete on a global scale — technical talent, depth of capital and disciplined governance — stand more in sync than they have in years.
From boom to baseline: funding and valuations
Capital has retreated from 2021 peaks across the continent, but not into a winter. Both Atomico’s State of European Tech and analysis from Dealroom and PitchBook tell the same story: annual investment came in well ahead of pre-2020 levels, with seed and early stage looking particularly robust. Late-stage rounds have been shrinking and taking longer to close, with median valuations in growth deals off their highs by 20–40%, depending on the sector and cohort.
That repricing, Bankiya argues, is a good thing. It has cleared momentum rounds and reoriented founders around growth that is efficient. The upside: paths to strong ownership for funds which lead early, and cleaner cap tables for companies that reserve burn for milestone-driven raises. With European-dedicated “dry powder” estimated to be in the tens of billions, there’s plenty of money — it’s just more price-sensitive and milestone-aware than ever.
Why American money is betting on Europe now
Among the most material changes, according to Bankiya, is greater U.S. participation. There are a few dynamics at play: deep benches of technical talent spun out of research hubs like Oxford, ETH Zurich and TU Munich; price discipline relative to coastal U.S. deals; stronger founder fluency in regulated categories — fintech, payments and privacy-first data tooling.
Remote norms of the pandemic era had accelerated cross-border dealmaking, and it was a habit that stuck.
Co-leads on both sides of the Atlantic now regularly serve as investors in AI infrastructure, cybersecurity and data governance — categories where European founders tend to build “compliance-by-design” products that can travel well worldwide. For Bankiya, it’s more than just capital inflow; it’s knowledge transfer that refines go-to-market playbooks and sharpens boardroom rigor.
Europe’s Achilles’ heel remains its broken exits
The continent is still struggling with a structural headache: a mishmash of national exchanges and listing regimes. And there’s no denying that fragmentation can siphon scale out of the market, depress liquidity and nudge founders to list elsewhere. The recent U.S. listing of Arm highlighted the draw of deep, tech-savvy investor bases and analyst coverage huddled around the Nasdaq and NYSE.
There are reforms underway in London and beyond to simplify listings, increase retail involvement and bring free float and dual-class rules up to date. But Bankiya’s point is a sober one: Europe needs more steady post-IPO performance to complete its flywheel. In the meantime, secondary sales and strategic M&A will continue to be key pressure valves for late-stage liquidity.
Regulation: constraint and competitive moat
Europe’s regulatory stance is often derided as a brake. Bankiya disagrees: for categories where trust is the by-product, regulation becomes the design brief. Regulations like the AI Act, PSD2/PSD3 and open banking, MiCA in crypto-assets, GDPR mean that founders must build strong data handling, auditability and risk controls from day one.
That discipline has produced standout companies in compliance automation, fraud prevention, data lineage and privacy-enhancing technologies. It also provides an export advantage: if you can meet Europe’s bar, it is often less challenging, not more, to sell into the U.S. or Asia. As Bankiya sees it, ultimately the winners will be infrastructure layers — tools that enable companies to safely integrate AI, meet regulatory thresholds and to document decisions without throttling velocity.
What’s hot: AI with money, fintech in infrastructure
On sector shape, Bankiya takes a practical approach. In AI, she prefers systems that are closer to workflows than demos — retrieval-augmented generation for regulated industries, agentic automation with transparent human-in-the-loop controls and data platforms that solidify observability, security and lineage. In fintech, she eyes the gravity being in “picks-and-shovels” as opposed to consumer apps: tax compliance across borders (ACB), payment orchestration, KYC/AML and treasury tooling that lowers the cost of capital for mid-market corporates.
What they have in common is predictable monetization, explained Bankiya. Europe’s theoretical advantages in B2B software — and that includes having mastered long sales cycles, successful global expansion from smaller home markets and a bias toward reliable software — map well against these opportunities. That’s part of why Dawn remains focused on early-stage, where ownership and time horizons are sympathetic to compounding execution.
The ‘Euro summer’ trope, permanently retired
And the unbreakable stereotype of European countries shutting down for the summer? Bankiya is dismissive. There’s seasonality to deal pacing everywhere; what counts are results. The pace of product launches, corporate pilots and revenue wins in the September-December window has only accelerated. When founders are forward-thinking — front-loading procurement cycles and aligning boards — momentum is rarely lost.
Bankiya’s larger conclusion winds through it all: European venture isn’t trying to be Silicon Valley 2.0. It’s playing to its strengths — world-class research, regulatory clarity and cross-border commercial chops — to create lasting category leaders. It stung, that reset, and also raised the bar. For disciplined founders, and for investors who are willing to do the work, that’s part of the idea.