In 2024, AI companies raised record levels of funding. Antler is set to back more than 40 new AI startups in Europe alone this year – the equivalent of one every nine days. This is set to continue into 2025 as AI companies start integrating with, and disrupting, some of the world’s biggest industries.

However, startups will face challenges around fundraising and recruitment as competition and the exodus of talent to the US picks up pace. There will also be more and more competition to stand out in the increasingly crowded European market.

The predictions from Partners reflect the biggest challenges founders faced in Europe this year. 41% of Antler’s European portfolio said fundraising was the biggest challenge they faced in 2024, followed by sales and customer acquisition (22%) and recruitment (11%).

However, 76% of the founders in Antler’s European portfolio said they plan to fundraise in 2025, and 55% felt optimistic about the fundraising landscape in the year ahead, expecting to see more funding activity and growth opportunities.

Alan Poensgen, Antler Partner in Berlin: “There are early indicators that we might have reached the peak of the first AI hype cycle, so I expect to see lots of consolidation in 2025 as founders and investors supply now outstrips demand for new AI technologies. Looking beyond AI, we are seeing some exciting fundraising activity in our portfolio in hardware and healthcare. Investors will be looking for real companies building real products generating real revenue.”

Tobias Bengtsdahl, Antler Partner in Stockholm: “In 2025, I expect to see the first true European breakthrough in Consumer Gen AI. Founders will continue to face challenges around fundraising and talent, although I hope the markets will have more liquidity next year. The two other big problems I expect founders to grapple with will be EU regulations, especially around AI, and the ongoing exodus of talent and great companies to the US.”

Adam French, Antler Partner in London: “Alongside AI I am excited about the growing strength of European deeptech companies, and the continued success of fintech and healthtech in the UK. This year, I have spent lots of time working with founders on building strong teams and fundraising. Next year, I expect to focus on AI integration across all business models, scaling in a sustainable way and helping founders navigate the economic and regulatory uncertainty that we see around the world.”

RJ Schuurs, Antler Partner in Amsterdam: “2025 is all about AI front, right and centre. It is also easier to build a startup than it ever has been. These components make it easier to start, but harder to stand out. So you need an amazing vision backed up by capabilities and a product velocity that is off the charts. Besides that, traction is even more crucial now as getting to customers has also become easier for everyone, not just for you.”

For more startup news, check out the other articles on the website, and subscribe to the magazine for free. Listen to The Cereal Entrepreneur podcast for more interviews with entrepreneurs and big-hitters in the startup ecosystem.