Across Europe, a new wave of entrepreneurial energy is reshaping the business landscape. From London’s fintech labs to the biotech corridors of Sweden, startups are not only flourishing — they’re building momentum toward something larger: a more connected, more competitive Europe. But as 2024’s impressive funding figures reveal, this moment of transformation is not without friction.
Startups across the continent secured over €47 billion in investment during early 2024 alone, with nearly €19 billion coming from debt funding. These numbers speak volumes: Europe’s appetite for innovation is strong, even amid global instability. But the real story lies in how this fragmented continent is learning to act as one — and what that shift means for the future.
In this article, experts from Zubr Capital explore key issues raised in the recent European Commission report, offering insights into how Europe can overcome systemic fragmentation and unlock its full startup potential. The road to unity is paved with opportunities — if we choose to connect.
The Investment Surge: A Sign of Europe's Startup Awakening
Capital is pouring into Europe’s startup ecosystems, and early-stage deals are leading the charge. Over 80% of transactions this year occurred at the pre-seed, seed, or Series A level — a clear sign of investor confidence in Europe’s pipeline of fresh ideas. Key sectors like climate tech, energy storage, and fintech are commanding attention, with climate tech alone attracting over €21 billion, much of it through substantial debt rounds.
The UK stands out as a leader in this surge, producing unicorns such as Quantinuum, Eleven Labs, and Wavye. The region drew €13.3 billion in startup investment, followed closely by Sweden (€12 billion) and France (€6 billion). These numbers reflect a thriving innovation scene — but one that remains geographically uneven.
Hidden Barriers: The Real Cost of a Fragmented Europe
Despite the buzz around funding, founders across Europe continue to encounter a stubborn reality: scaling a business across borders can feel like navigating a labyrinth. Regulatory inconsistencies, tax code differences, and national labor laws make each expansion a bureaucratic challenge. The result? Higher costs, slower growth, and unnecessary hurdles that dim Europe’s competitive edge.
Even employee stock option policies — a crucial incentive in the startup world — vary significantly from one country to another, making it harder to attract and retain top-tier talent. In this environment, even high-potential startups can seem riskier or smaller than their U.S. or Asian counterparts.
Rewiring the Continent: Building Bridges Between Startup Ecosystems
If fragmentation is Europe’s greatest hurdle, then connectivity is its most powerful answer.
A growing number of startups are already rewriting the playbook by embracing cross-border strategies. Today, roughly one-third of founders in Europe relocate to more supportive ecosystems, with cities like Berlin, Paris, and Barcelona emerging as key hubs thanks to better access to funding, talent, and inclusive startup cultures.
Teams are increasingly international by design. Over 74% of EU startups operate across borders — sourcing talent, raising capital, and entering new markets in parallel. A standout example is fintech company Payhawk, which retains its development operations in Bulgaria for cost efficiency while scaling commercially in Berlin and London. This approach reflects a growing understanding: in Europe, agility is synonymous with geography.
Accelerators as Ecosystem Engines
At the heart of this continental shift are accelerators — dynamic hubs that do more than provide capital. These programs offer mentorship, network access, and operational support, helping early-stage startups chart a path through the complexities of growth.
The data tells a compelling story: startups participating in accelerator programs report survival rates of up to 85% over five years, compared to the average 50%. Cities like Paris, London, and Berlin lead the charge, with more than half of cross-border-expanding startups relying on their accelerator ecosystems. Participation in such programs often results in a 35% increase in follow-on funding.
Corporate accelerators like Techstars and Plug and Play are helping bridge the gap between startups and established industry players — especially in fast-moving sectors like healthtech and fintech. Meanwhile, research-intensive fields such as biotech and cleantech increasingly benefit from academic accelerators, where access to infrastructure and expertise proves vital.
The “pipeline” model — in which accelerators act as connectors between startups and broader innovation networks — has been particularly effective. In Central and Eastern Europe, these models have helped reduce time to market by 40%, underscoring the power of structured, connected support.
Funding the Gaps: Where Potential Still Lags Behind
While investment is growing, access remains uneven. Many promising startups — especially those in less developed regions — still struggle to secure early-stage capital or attract attention from major funds. Fundraising timelines are growing longer, and fragmented capital markets slow down momentum.
Without a unified exit market, many European startups eventually look westward, seeking IPOs or major funding rounds in the United States. The resulting talent migration — a “brain drain” of sorts — highlights the urgent need to strengthen domestic opportunities and keep Europe’s best ideas at home.
This is where regional venture funds like Zubr Capital step in. With operations in Poland and Cyprus, Zubr is actively investing in underfunded regions, offering crucial support to high-potential startups — including those relocating from countries like Ukraine. For many founders, the barrier isn’t ideas or talent, but financing. By aligning them with European institutions and financial frameworks, funds like Zubr are narrowing the gap and helping unlock latent value across the continent.
Smart Policy: A Foundation for Sustainable Growth
Connectivity doesn’t stop at capital and collaboration — it also demands alignment on policy. That’s where organizations like the European Startup Nations Alliance (ESNA) and Horizon Europe CONNECT come into play.
ESNA is championing regulatory harmonization, working to make cross-border hiring and company registration more seamless. Meanwhile, Horizon CONNECT funds ecosystem-building initiatives that encourage transparency, openness, and shared resources — the foundation for what could become a truly unified European innovation space.
Together, these efforts point to a policy environment increasingly responsive to the needs of entrepreneurs.
What the Future Could Look Like
Imagine a Europe where expanding across borders feels as natural as scaling within a single city. Where founders don’t have to choose between growth and complexity. Where accelerators, funds, and policies are all pulling in the same direction — toward global competitiveness.
To get there, the roadmap is clear:
Simplify regulation to allow frictionless expansion.
Foster collaboration through accelerator networks, events, and public-private partnerships.
Invest in talent infrastructure, from visas to stock options to education.
Europe doesn’t lack visionaries — it simply needs to better connect them.
Closing Thoughts: Europe’s Moment to Lead
At Zubr Capital, we believe that Europe's startup ecosystem is not just growing — it’s evolving. The continent has everything it needs to become a global powerhouse: innovative minds, mission-driven founders, and an expanding pool of capital. What’s missing is unity.
By closing funding gaps, aligning ecosystems, and creating founder-friendly policies, we can turn Europe into fertile ground for startups that compete — and thrive — on the global stage. The future is not only bright; it’s connected.