The midpoint of 2025 has arrived, so it’s time for us to look back before we look ahead. European VC reached €16.7 billion in Q1, projecting a potential ~€67-68 billion year ahead. AI & ML deal value surpassed SaaS in this period, sitting at 27.5% of the total deal value for the quarter, while Life Sciences held firm at €2.5 billion.
While regular tech VC funding has retreated by 60% since 2021, deep tech capital now accounts for almost one-third of all European VC and fell just 28% from its 2021 peak—proof that science-driven innovation remains the continent’s growth engine. Despite a challenging funding environment, reporting data from Pitchbook projects European VC achieving around a 10.8% year-over-year increase. The UK & Ireland are the only region cited in the report with an increase of 12.4% year-over-year in deal activity.
Against that backdrop, our portfolio and partners have made headlines over the past month across our three investment areas: Intelligence, Human, Planet.
- Our CEO & Co-Founder Dame Anne Glover was recognised in the King’s Birthday Honours for championing UK science-based innovators. Also signing a joint letter to the UK Government urging the UK’s forthcoming pension “megafunds” to fuel high-growth innovators.
- Photonic Inc. announced a £25 million investment over the next three years in a new UK quantum R&D hub, creating 30 high-skilled jobs and deepening Canada–UK collaboration.
- Nu Quantum unveiled the world’s first rack-mounted Quantum Networking Unit, moving real-time entanglement from lab to data centres.
- PolyAI’s human-like voice agents featured in The Wall Street Journal, underscoring the shift from IVR scripts to autonomous task execution.
We unpack the month’s news and the market drivers behind it below.
Intelligence
AI’s centre-stage moment. Artificial intelligence swept past SaaS in Q1: AI & ML attracted €4.6 billion, 27.5% of all European deal value—for the first time since Pitchbook began recording this data. That momentum underpins our own news: in the debut episode of In Focus, Nikola Mrkšić reveals how PolyAI rebuilt voice tech around user-centred design, a story that also landed a feature in The Wall Street Journal. For a 50-year perspective on the development of this technology, listen to our podcast with Professor Steve Young, who traces speech tech from toolkits to AGI.
Our Partner, Manjari Chandran-Ramesh, also spoke at VivaTech News while in Paris this month, highlighting how we’ve been investing AI for over two decades.
Building for quantum. Nu Quantum released a new rack-mounted Quantum Networking Unit, bringing scalable real-time entanglement to data centres and taking quantum networking from lab concept to real-world deployable hardware. Photonic also announced a £25 million UK R&D hub that will create 30 high-paying jobs as they work towards fault-tolerant quantum computing.
Governance is a growth lever. In The Engineer, Amadeus Partner Nick Kingsbury shows how well-governed AI already catches fraud, predicts supply-chain shocks and automates privacy redaction—turning compliance into competitive advantage. He shares his take on how AI can reduce risk in regulated industries – “Responsible scaling, not rapid adoption, is the path to real impact.”
Human
Health-tech resilience. Even in a cautious market, life-sciences startups secured €2.5 billion in Q1—tracking a 19.9 % year-over-year increase. Cambridge showed why during Wide Open Week: Constructive Bio, Nuclera, Quibim, NATROX® and Charco Neurotech each demonstrated how technologies are converging to tackle drug discovery, imaging and chronic care. Each pitching to an engaged audience as part of the Ventures Tour sessions, which our Co-Founder, Hermann Hauser opened with a keynote.
From lab to market. At the Global Alternative Investment Conference our Partner, Pierre Socha, took to the stage to share his take on backing the next generation of Unicorns with South Korean investors and entrepreneurs.
Planet
Cleantech matures. The sector drew more than €1 billion in Q1, proving hard-tech sustainability plays remain investable. Channel 4’s primetime feature on Xampla’s Morro™ materials—plant-based coatings that erase hidden plastics in packaging—shows consumers are ready, too.
Energy-hungry AI will drive innovation. Manjari also joined Dublin Tech Summit panel on the grid-level innovation needed for the insatiable energy appetite of AI. Data centres could drive more than 20% of the growth in electricity demand by 2030. Training current AI models has been widely reported for its energy-consumption, prompting companies like Inephany to develop tools that can optimise and tune AI models to use less energy and capital. Further development across the stack, from hardware in data centres to model training optimisation is in demand.