Key Takeaways
- • European venture capital investment reached a half-year record of €11.5bn in H1 2026, up 11% year on year, according to preliminary Invest Europe data, even though fewer companies received funding.
- • Total private markets investment fell 35% to €43.1bn, driven by a 42% drop in buyouts to €24.5bn, while private equity and VC funds raised €67.6bn, up 6%.
- • Buyouts accounted for about 79% of capital raised (€53.6bn, up 29%), while venture funds raised €7.9bn, down 3%.
- • Defence investment more than doubled to €2.7bn, and deeptech investment rose 35% to €8.5bn, with UK and Ireland driving much of the gain.
- • Exits fell as divestments at cost dropped 40% to €13.2bn, though listings rose to 13% of exits, their first double-digit share since H2 2021.
Summary
Venture capital investment in European companies hit a half-year record of €11.5bn in the first half of 2026, an 11% increase on a year earlier, according to preliminary data from Invest Europe. The industry body published the figures alongside a survey of fund managers and their investors conducted with consultancy Arthur D. Little. Invest Europe said the increase came mainly from the UK and Ireland and from larger seed and later-stage rounds, notably even as fewer companies received money. Eric de Montgolfier, Invest Europe's chief executive, said Europe's stability is drawing capital to its private markets, adding that capital in the hands of experienced managers is flowing into companies supporting Europe's strategic agenda, innovation and competitiveness.
Across private equity and venture capital, funds raised €67.6bn in the half, up 6% on the revised figure for H1 2025. Total investment, however, fell 35% to €43.1bn, pulled down by buyouts, which declined 42% to €24.5bn. Growth investment dropped 48% to €6.8bn. Buyout funds raised €53.6bn, up 29% and roughly 79% of all capital raised, while venture capital funds raised €7.9bn, down 3%. Divestments at cost fell 40% to €13.2bn, the lowest half-year total since 2020. Stock market listings accounted for 13% of exits, up from 7% a year earlier and the first double-digit share since the second half of 2021.
Defence investment reached €2.7bn, more than double the €1.3bn recorded in H1 2025, and deeptech companies received €8.5bn, up 35%, helped by growth in the UK and Ireland. Survey respondents pointed the same way: three in four fund managers expect more defence investment, 53% expect more in aerospace, and 62% expect more in deeptech and AI. Continuation fund fundraising cooled to €2.4bn, down 78% from a record €11.3bn a year earlier.
Investors signalled geographic shifts. Because of Washington's trade stance, 43% expect to increase allocations to Europe over the next three years, while 30% expect to reduce US exposure and 29% expect to increase European allocations due to the conflict in the Gulf. AI is the dominant theme: 82% of fund managers said AI will be their teams' biggest focus next year, ahead of exits, and its impact is now the top issue in due diligence. Some 69% said the industry is already consolidating. Jonas Fagerlund, partner at Arthur D. Little, said AI capabilities have moved from 'nice to have' to 'must have', transforming GP operations and portfolio companies.
All H1 figures are preliminary, and Invest Europe expects final numbers to rise as more data is collected.
Across private equity and venture capital, funds raised €67.6bn in the half, up 6% on the revised figure for H1 2025. Total investment, however, fell 35% to €43.1bn, pulled down by buyouts, which declined 42% to €24.5bn. Growth investment dropped 48% to €6.8bn. Buyout funds raised €53.6bn, up 29% and roughly 79% of all capital raised, while venture capital funds raised €7.9bn, down 3%. Divestments at cost fell 40% to €13.2bn, the lowest half-year total since 2020. Stock market listings accounted for 13% of exits, up from 7% a year earlier and the first double-digit share since the second half of 2021.
Defence investment reached €2.7bn, more than double the €1.3bn recorded in H1 2025, and deeptech companies received €8.5bn, up 35%, helped by growth in the UK and Ireland. Survey respondents pointed the same way: three in four fund managers expect more defence investment, 53% expect more in aerospace, and 62% expect more in deeptech and AI. Continuation fund fundraising cooled to €2.4bn, down 78% from a record €11.3bn a year earlier.
Investors signalled geographic shifts. Because of Washington's trade stance, 43% expect to increase allocations to Europe over the next three years, while 30% expect to reduce US exposure and 29% expect to increase European allocations due to the conflict in the Gulf. AI is the dominant theme: 82% of fund managers said AI will be their teams' biggest focus next year, ahead of exits, and its impact is now the top issue in due diligence. Some 69% said the industry is already consolidating. Jonas Fagerlund, partner at Arthur D. Little, said AI capabilities have moved from 'nice to have' to 'must have', transforming GP operations and portfolio companies.
All H1 figures are preliminary, and Invest Europe expects final numbers to rise as more data is collected.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.