- VC funding to European startups continued its collapse in 2023, but AI startups have been resilient.
- Breakout AI startups such as Mistral, ElevenLabs, and Synthesia have captured investor attention.
- Insider profiled 15 of the most prolific AI-startup investors in Europe, according to PitchBook data.
AI has been a shining light in an otherwise bleak year for startup funding.
The November public release of OpenAI’s ChatGPT sparked a surge in investor interest in generative artificial intelligence, which has been used to create everything from art and music to new protein models and materials. According to Dealroom data, venture capitalists have already invested $51.9 billion in AI startups this year and are on track to exceed the $65.5 billion invested in the sector in 2022.
Mistral, billed as Europe’s OpenAI competitor, was only four weeks old when it raised a massive $113 million seed round led by Lightspeed. Stability AI, the London-based company behind the text-to-image generator Stable Diffusion, which was recently valued at $1 billion, is also backed by Lightspeed and the New York private-equity firm Coatue. Meanwhile, Andreessen Horowitz has invested in ElevenLabs, an AI-voice-intelligence startup, and Sloyd, a Nordic AI startup.
National funds and startup accelerators are among Europe’s most active AI investors. Using PitchBook data, Insider examined some of the busiest global investors in the region investing in AI startups — defined as companies that incorporate AI as a significant part of their product or service — based on deal flow and the total value of investments they have been involved in since 2020.
Because many of the top US VC firms have increased their investments in Europe in the last year, their involvement in the continent since 2020 is less representative when compared to the funds in the total dataset, which spans the years 2020 to 2023.
With $713 million poured into AI startups since 2020, London’s Phoenix Court, the parent company of VC firm LocalGlobe, took the top spot for total investment value. MMC Ventures, also based in London, followed suit, investing $628 million in AI startups.
In no particular order, Insider has profiled 15 investors at these firms who have spearheaded investments in European AI startups.