GlobalData
8 min read
Spring 2025 marks a turning point for the European venture capital market: the turbulence of previous years is giving way to a search for new points of stability. On the surface, the overall volume of investments has held steady at around $12–13 billion for Q1, but the logic of deals and investor priorities has clearly shifted. There are fewer rounds, average check sizes have grown, and both startups and founders now face much higher standards.
In this article, I outline the key trends of the spring season, analyse where the money is actually going, which segments are attracting the attention of major and niche funds, and what this means for the market, LPs, GPs, and founders. I explain why infrastructure, deep tech, and B2B have come into focus—and which previously hyped sectors are now being left behind.
This perspective aims to understand how the market is building new foundations after the “easy money” era, how the strategies of leading players are evolving, and which scenarios are becoming most likely for the second half of the year.
In spring 2025, European venture capital has taken a deliberate step away from chasing the next big platform for everyone. Instead, investors are channelling capital into start-ups that own one specific pain point—and solve it better than anyone else.
This change is most visible in the priorities of leading funds. When Cathay Innovation launched its $1B fund this spring, it made clear: that the capital would flow only into vertical AI applications, such as healthcare diagnostics, financial automation, or energy optimisation. The era of “AI for everything” is over; now, investors want AI for something real. Smartfin, too, repositioned itself strictly as a backer of B2B infrastructure scale-ups, while Cherry Ventures doubled down on single-solution early-stage bets in key European hubs.
Investment rounds echo the same shift. Isomorphic Labs raised €556M for AI-driven drug discovery, not a generic platform. Rapyd’s €474M round was all about expertise in the toughest corner of payments compliance. Even Reneo’s €600M in climate tech was grounded in focused, technical innovation.
Why does this matter? Because LPs have grown tired of stories and scale for scale’s sake. They want evidence: deep product-market fit, visible technical advantage, and a defensible moat.
At Zubr Capital, we see this as a healthy correction. The winners will be those who choose depth over spread—delivering mastery in one vertical, not chasing every market at once.
