European startups are thriving once again. For the first time in decade, the region’s VC funding surpassed that of Asia in Q2, with 31% quarter-over-quarter and 13% year-over-year increases. Total funding reached almost $16 billion.
Three startups were also crowned unicorns, pointing to a healing funding landscape that struggled for the past two years. In 2023, investors were more than careful with their spending, leaving startups stranded with a 39% year-over-year funding shortfall.
What’s true is the industry won’t be seeing 2021 numbers anytime soon, which is why it’s currently facing a stabilization period to bounce back from a massive bubble and a steep decline.
Unsurprisingly, AI companies are receiving the most interest this year—from automated cybersecurity to travel platforms that match people via algorithms. On the other hand, fintech continues delivering valuable solutions while cleantech begins its ascent as the next big sector to watch.
As things begin to look up for European startups, let’s take a look at some up-and-coming regional companies we’re setting our sights on for their continued growth and innovation in the tech space.
Raily
Raily is German-based social hub for travelers looking to connect people and places with AI and other technologies pending patent. The company recently announced its $1.7M pre-seed round, which aims to expand features like Web3 for booking flights and hotels.
Beyond AI, the platform leverages AR and XR, and is working on integrating neuropsychology to create worthwhile travel experiences that match people with locals and other travelers and recommend exciting places for them to make the most of their trips.
It has also participated in Microsoft for Startups, Nvidia Inception Program, and Google for Startups, and has garnered partnerships with GetYourGuide, DiscoverCars, Airalo, and Viator.
nerdytec
Also headquartered in Germany, nerdytec is the dream of Roman Jakob and Chris Mut, two college friends who decided to team up to revolutionize the gaming peripherals market. The company mainly focuses on its innovative Couchmaster, a series of modular couch desks with ergonomic features and unique designs, like their cyberpunk-inspired CYCON, the textured and playful CYPINK, or the essential work-from-home CYWORX.
These products aim to offer comfort and elevate the gaming and working experience on any cushioned surface with flair and aesthetic designs.
nerdytec also offers peripherals like snack trays, tablet holders, and mousepads, and in the past year, released a specialized keyboard for gamers. The German company is also committed to keeping their products sustainable by sourcing natural materials for their products.
Zentrela
This company has recently penetrated the EU market with its one-of-a-kind neurotechnology device, the Cognalyzer®. Its founding team includes scientists in neuroscience and AI who set out to build a commercial brainwave scanner to test the effects of drugs such as cannabis in the brain.
The Cognalyzer® is the only scientifically proven test available today. It provides speed and accuracy in psychoactive trials in humans, reducing them from 18 months to three months. Zentrela aims to commercialize brainwave testing through cutting-edge technology and AI.
Zentrela’s product enters the European market at crucial time for cannabis legalization, which started last year after Switzerland launched the first regulated sales of adult-use cannabis, followed by Germany. As regulation standardizes the cannabis market, the industry will begin to thrive in the continent.
Trickest
Trickest is a Belgrade-based offensive security company focused on automating cybersecurity processes like surface monitoring, red teaming, and threat intelligence. The company was founded by former bounty hunters Nenad Zaric and Mihailo Tomic, whose love for technology sent them on a quest to democratize cybersecurity with quality hacker-grade tools.
Trickest’s dedication to building comprehensive cybersecurity solutions for all has led them to form a community of IT professionals helping each other solve the ins and outs of this complex industry via forums, a Discord channel, and ongoing blogs to educate the workforce.
The company’s solution has become relevant now more than ever as Europe faces escalating cyber threats in the tech space — security spending is set to grow by 12.3% this year.
Compocity
Compocity is on a mission to reduce waste on the enterprise level, helping office communities compost their organic waste in the innovative indoor compost device, the CompoBot.
In a single year, the CompoBot minimizes 4,368 kilograms of carbon dioxide emissions, reaches 200 eco-conscious users daily, and generates 728 kilograms of fermented organic waste.
Co-founded by Emese Pancsa and Máté Brezovcsik, the company empowers businesses to achieve sustainability goals by transforming office food waste into valuable resources for local ecosystems. Emese’s TEDx Talk, “Design that Gives in Return,” encapsulates her vision of creating meaningful, sustainable solutions that benefit both people and the planet.
The co-founder’s inspiring journey is a testament to the transformative potential of interdisciplinary collaboration and innovative thinking.
Innosabi
This German startup leads the way in innovation management software in Europe. innosabi offers a comprehensive suite to propel companies’ efforts to innovate with new business models — from supply chain solutions to platforms that enable employee innovation and customer feedback loops.
Catharina van Delden, one of innosabi’s co-founders, has previously said digital business is all about innovativeness, “It is all about who delivers the most customer value in the end by creating new products and services.”
The company also delivers consulting services so companies on a mission to innovate can leverage the knowledge of experts alongside their cutting-edge tools. In a competitive landscape where innovation is key to growth and success, innosabi is empowering businesses to do so through a frictionless experience.
VideoHeroes
VideoHeroes is an adtech startup based in Madrid, Barcelona, and London. Its leadership team of former publishers is revolutionizing how people approach advertising in a cookieless era with AI-powered services.
VideoHeroes understands the needs of modern publishers and is tackling industry obstacles with technology that takes ads to the next level. The company’s platform identifies data patterns to target the right audience and maximize ROI with a level of precision that was difficult to achieve before the AI era.
Because targeted advertising and cookies have become a hot topic worldwide — with the EU continually adjusting GDPR rules — VideoHeroes ensures their practices follow strict data privacy regulations inside the EU and other regions like California’s CCPA without affecting service quality.
Fracttal
Fracttal is maintenance management platform that streamlines the way companies connect with technicians. The Colombian company has already penetrated the European market with offices in Spain and a strong presence in Portugal, with a wide array of clients in the food, manufacturing, healthcare, energy, and other sectors.
The company’s potential is undeniable, already amassing over 30,000 users from 50 countries.
Fracttal’s software, Fracttal One, leverages AI to predict equipment maintenance, manage warehouse inventory, automate routine maintenance tasks, generate reports, and more. This platform makes it easier for companies to take care of the technical aspects so they can run their business with more efficiency, proactiveness, and speed.
Transmetrics
This logistics startup based in Bulgaria is taking the supply chain by storm — simplifying the complexities of this industry with AI tools. Transmetrics’ platform optimizes transport planning by leveraging the power of machine learning from IBM Watson and predictive analytics.
The company analyzes historical data to plan logistic resources more accurately and efficiently, breaks data down into granular levels for better shipment predictions, and enriches data quality. In an industry where time and resources are of the essence, Transmetrics is making it much easier for logistics companies to make decisions based on actionable insights rather than loose estimations.
The company is also aware of the impact the industries they service have on the environment. That’s why they enforce sustainable practices by tracking carbon emissions and suggesting ways to reduce the environmental footprint.
Mistral AI
This French startup, founded just last year, is already making waves after raising around $640 million in Series B funding and receiving a valuation of $6 billion. The company aims to build an AI model that rivals giants like Open AI and Anthropic in Europe.
Mistral AI has already released open-source models like Mistral Nemo and Mistral Large 2. It also designed Codestral, a restricted-license AI model that generates code, Mathstral to solve mathematics problems, and Mixtral for text extraction, among many more specialized tools.
The company also allows the public to refine their AI models independently or through its proprietary platform, Le Plateforme, to narrow down use cases and improve the usability of its products.
QuickBlox
QuickBlox wants you to build better communication services through its advanced cloud communication backend platform. Their pre-built service allows users to quickly implement communication services, whether on mobile or web platforms, via SDKs and APIs — even making for an experience akin to WhatsApp, Skype, and Viber in a few days.
The London-based company with teams across Europe also offers AI capabilities, such as the SmartChat Assistant which can be trained on each company’s data, and more AI extensions.
QuickBlox services companies of all sizes in healthcare, finance, retail, education, and beyond, where communication services can make or break customer trust. As a result, the company prioritizes customization, multi-channel options, and ease of use.
Hypothesis
Founded in 2011 by Dan Whaley, Hypothesis was his vision for enhanced circulation of information online. The result is the company’s web and PDF annotation tool to help people in academia and the professional sectors take centralized notes in private or public, granting access to entire teams and students.
The edtech company describes their tool as “social annotation” as it enhances learning and research outcomes through collaboration and easy access to information. By enabling students and educators to collaboratively annotate, highlight, and discuss digital texts in real time, the platform fosters deeper interaction and understanding of course materials.
Hypothesis is widely used in higher education institutions in Europe, such as DIS Copenhagen and the Royal College of Music, where its highly interactive tool has helped improve student retention and engagement.
Labelbox
Having fundraised $189 million so far from prominent firms like Andreessen Horowitz and Kleiner Perkins, Labelbox facilitates task-specific AI models for industries like aerospace, retail, financial services, and healthcare. The company has offices in San Francisco, New York, and Wrocław.
Labelbox has pioneered AI data factories since 2018 and is now thriving in this AI-powered era. Its platform allows for data labeling, curation, and assisted alignment for improved data generation, and enables computer vision, the creation of generative AI models, and NLP and LLMs.
You could say the industry has never been more ripe for a company like this to expand and continue carving its path to success.
Jifiti
Co-founded by Yaacov Martin and Meir Dudai in 2011, this fintech company set out to connect lenders and banks with merchants so they can offer loans at their point of sale. It has since become one of the leading white-label Buy Now, Pay Later (BNPL) services available today.
The company aims to provide companies and customers with affordable payment solutions that follow responsible practices from regulated financial institutions — this transparency sets them apart from the competition.
In late 2023, the company announced it was granted an Electronic Money Institution (EMI) License in Europe, which has allowed it to expand in the region and continue offering payment facilities to its clients’ customers.
This license also serves as comprehensive validation of Jifiti’s robust compliance and regulatory standards, which include SOC 2 and ISO 27001 certifications.
SQream
SQream is a pioneering Israeli company that implements NVIDIA’s GPU technology to revolutionize data processing and analytics. Their native SQL on GPU solutions, available for both cloud and on-premises environments, minimize processing times and costs across industries like manufacturing, finance, and advertising.
SQream’s solutions accelerate data-heavy tasks, enabling faster analytics, machine learning, and AI at scale. Among its products are the no-code solution for SMBs Panoply, the SQreamDB SQL database, and the cloud lakehouse SQream Blue.
The company’s proven track record of successful implementation is demonstrated in partnerships with companies such as Alibaba Cloud, LG Electronics, PubMatic, and Mobicom.