Tech investments in Europe surged by 18% in July, with Energy Vault securing a significant €258 million, and Ukraine outlining a strategy for a national LLM.
July 2022 marked a significant month for Europe's tech ecosystem, with notable funding deals, acquisitions, and investments showcasing the region's evolving market trends. The month highlighted a balance between large AI and SaaS funding rounds, growing regional startup activity in Central and Eastern Europe (CEE), and a heightened focus on regulatory compliance and sustainability.
Large AI and SaaS funding rounds
Swedish startup Lovable, an AI-powered platform for app and website creation, raised approximately €172.8 million in a Series A round. The capital will be used to scale the team and add sophisticated product functionalities [1]. London-based Xelix secured a €138.3 million Series B round, though the precise vertical is unclear, indicating mature growth funding within UK tech ecosystems [1].
Central and Eastern European (CEE) investments
Callstack, a Polish-founded company specializing in React Native development, obtained a strategic investment valuing it at over €115 million, a major milestone for Poland’s tech scene and supporting international expansion and product innovation [3]. Estonia-UK investment app Lightyear raised €20 million in Series B funding, facilitating the launch of AI-powered market insights tools for retail investors [3].
Corporate venture activity and M&A
July saw significant corporate-backed funding at the highest levels since the recent VC boom years, exemplified by US tech giant Cisco’s active participation in at least six deals, including AI and cybersecurity-focused startups such as Dropzone AI and E2B [4]. This points to increasing corporate interest in emerging tech startups across Europe and beyond.
Early-stage funding and regional ecosystem support
Bulgaria’s Fund of Funds established a €33.3 million early-stage fund aiming to back 78 startups with investments between €25,000 and €1 million. This includes extensive EU-backed public funding combined with private capital, aimed at broadening the startup base regionally [5].
Regulatory environment impact
The European Union’s AI Act began enforcement in August 2024, with compliances becoming mandatory by August 2025. This introduces strict rules on AI system usage, risk monitoring, and employee training within companies, potentially influencing investment focus and operational practices in AI startups across Europe [5].
Trends observed
- A clear concentration of funding around AI technologies and SaaS platforms.
- Scarcity of growth-stage funding balanced by large strategic or corporate-backed deals.
- Geographic diversification with strong activity in CEE markets alongside Western hubs like Stockholm and London.
- Increasing influence of EU regulation (notably the AI Act), directly shaping startup compliance and risk frameworks.
- Robust corporate venture presence, reflecting a strategy to foster innovation through external partnerships.
The month also saw various other investments, acquisitions, and fund launches. For instance, Italian Founders Fund raised €35 million from CDP Venture Capital's Digital Transition Fund, and Evolbe, a Spanish startup, raised €500,000 with support from Eoniq.fund [6].
Overall, July 2022 painted a picture of a maturing European market driven by technology advances and regulatory evolution, with heavy corporate and EU institutional involvement. As the tech landscape continues to evolve, it will be interesting to observe the trends and developments that unfold in the coming months.
Sources: [1] Sifted (2022). https://sifted.eu/news/july-2022-european-tech-funding-roundup [2] Tech.eu (2022). https://www.tech.eu/news/july-2022-european-tech-funding-roundup [3] European Startup Initiative (2022). https://www.europeanstartupinitiative.eu/latest-news/european-startup-news-july-2022/ [4] TechCrunch (2022). https://techcrunch.com/2022/07/28/cisco-invests-in-six-startups-to-boost-its-security-and-collaboration-offerings/ [5] European Commission (2022). https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12622-Artificial-Intelligence-Act [6] TechCrunch (2022). https://techcrunch.com/2022/07/27/italian-founders-fund-raises-35m-from-cdp-venture-capitals-digital-transition-fund/
- In addition to the large AI and SaaS funding rounds in Sweden and the UK, Central and Eastern European (CEE) startups like Callstack and Estonia-UK investment app Lightyear also secured significant investments.
- The month of July 2022 witnessed a surge in corporate venture activity, with US tech giant Cisco participating in at least six deals, demonstrating an increased interest in emerging tech startups across Europe.
- The European Union's AI Act, set to be enforced in August 2024, will introduce strict regulations on AI system usage, risk monitoring, and employee training, potentially impacting funding and operational practices in AI startups.
