EUROPEAN VC FUNDING SURGES 30%, AI DOMINATES

European VC funding hit $17.6 billion in the first quarter of 2026, marking the second consecutive quarter of growth and a significant jump from the same period last year. The surge masks a striking shift in market dynamics. While total funding volume increased 30%, the number of deals closed fell 40% year-over-year, indicating capital is consolidating around fewer opportunities. Artificial intelligence dominated the funding landscape, accounting for over 50% of all European venture capital in Q1. This concentration reflects a broader global trend where investors are channeling resources into AI-focused companies while remaining cautious about other sectors. The data, compiled by Crunchbase, shows European venture capital remains resilient despite broader economic uncertainty. However, the steep decline in deal volume raises questions about market accessibility for non-AI startups seeking funding in the region.