October 19, 2023

Q3’s winners: climate infrastructure, AI startups and Sweden

The data for July, August and September is in, and it’s a mixed bag for European tech

Source: Unsplash

Europe saw just over 2,000 deals in Q3 2022 — the lowest number on record since Q4 of 2015, and down 31% from the 2,900 deals done a year ago, according to Dealroom. On a brighter note, total funding (including convertibles) rebounded to $18.9bn — the highest since Q3 2022, largely driven by megarounds secured by climate infrastructure and AI startups that had so far been scattered in 2023. 

Over a quarter of the total funding was pulled in by four deals, while early-stage funding nosedived, with Series A funding declining 32.5% over the previous quarter.   

Sweden finds its groove

For a second consecutive quarter, Swedish startups raised the second most funding in Europe ($3.4bn), beaten only by the usual suspects: UK startups ($6.3bn). French startups took third place with $2.5bn raised (thanks in big part to battery maker Verkor’s €850m round), while German startups took fourth place with $2bn raised in total.


Swedish startups are having a moment thanks to some big climate tech rounds, including the €1.5bn raised by H2 Green Steel and a $1.2bn convertible raised by Northvolt.

This is one of only 13 times a country other than the UK, France or Germany has made it into the top three best-funded ecosystems since 2012, with Sweden doing it more frequently than any other nation (seven times to be exact).

If those megarounds of $100m+ are removed from the equation, Sweden slips to fourth place just above Switzerland.

AI frenzy

At $2.8bn, Q3 saw the most investment in AI startups in the last five quarters, but the lowest number of funding rounds since Q3 2015. Several AI startups — including Accenta, Poolside AI and Helsing — all raised $100m+ rounds in Q3 2023. 

The largest AI round of the quarter came from the UK’s second city, Birmingham, when self-driving tech developer Conigital secured a £400m Series A in September.

The promise of climate infrastructure

The four biggest deals of 2023 to date were signed in Q3 and all have one thing in common — capital-intensive climate infrastructure. 

H2 Green Steel, Northvolt, Verkor and battery storage facility/charging point operator Zenobe Energy altogether raised $4.5bn — comprising 25% of the entire European tech ecosystem’s spoils this quarter. 

Fintech continues its downward spiral

For the first time since 2016, fintech’s dismal performance in Q3 has meant it missing out on Europe’s top three funded sectors two quarters in a row. It dropped to the fifth most-funded sector in Q3 2023, picking up merely €1.2bn in funding, a far cry from the €4.3bn it picked up in Q3 last year.

The biggest fintech deal of the quarter was Dutch challenger bank bunq’s €100m Series B in July 2023. This fell some way short of the €193m Series A it raised exactly two years ago, at the same valuation. 

For the latest analysis and market intelligence on European tech in Q3, check out our Briefing — exclusive to Sifted Pro subscribers.


Federico Scolari

Federico Scolari is a junior intelligence analyst at Sifted. Find him on LinkedIn

Shubham Jaipuria

Shubham is a data analyst intern with Sifted Intelligence, and can be contacted on LinkedIn

Jonathan Sinclair

Jonathan Sinclair is intelligence research manager at Sifted. Find him on LinkedIn