Investors should pay attention to months like August, as the lack of a major headline story doesn’t lessen the signals of how capital is beginning to rebalance. There is still a story, but with many plots where momentum in the industry builds, where some areas recede, and where new patterns quietly take root.

We at Zubr Capital pay close attention to such undercurrents – less the noise of individual rounds, more the structures that hint at the next cycle taking shape.

Europe’s Geography split: UK as the epicentre, CEE as the experiment garden

If there were a geographic centre for August, then it would be in the UK. Dozens of funding rounds originated there, making up about half of all raised capital in Europe. The most prominent and visible rounds clustered in the UK were:

• CHARM Therapeutics closed a €68.5 million Series B to advance oncology biotech
• Phasecraft secured €29 million for its quantum software work
• Attio drew €44 million to scale its AI-native CRM

Taken together, these results underline London’s ability to anchor serious capital across biotech, deeptech, and SaaS – a market that continues to attract growth-stage investors even in a cooler climate

As for Central and Eastern Europe (CEE), the market was smaller in scale. There were only a handful of deals, with most being below the €5 million mark. While the CEE lacked the size of the UK, it did offer variety, such as:

• Buylo in Prague raising €640K for RFID development in retail tech
• Better Medicine in Tallinn getting €1M for AI radiology diagnostics
• Bisly receiving €4.3M for smart building automation
• GREÏ in Vilnius finding €650K pre-seed funding for AI operational intelligence

The CEE demonstrates a broader scope of investment, similar to a garden of experiments where new niches are tested and early signals of the next wave can often be found.

August’s sector map: mass themes and hidden sparks

August’s sector map showcased both the scale of funding and novelty. Most of the capital flowing into these various projects focuses on familiar “mass” themes, such as AI, health, and climate technology. Climate itself enjoyed a cluster of mid-sized rounds like EV charging from Deftpower in the Netherlands (€12.5 million) or maritime cleantech efforts from Green Bunkers in Spain (€5 million). AI continued its ongoing effort to expand into vertical applications, such as Artificial Societies in London (€4.5 million) and the Nordic hiring tech Hubert (€2.5 million).

However, the mass themes couldn’t hide where interesting spikes appeared. AI applied to cybersecurity is one example, with four startups raising capital across the UK, Germany, and France, including RedMimicry and Phoebe. Cyber has always been present in European dealflow. Still, the overwhelming wave of AI-driven security integrations marks a significant shift. The shift from background layer to front-line theme signals less of an isolated set of rounds and more like the first outlines of a new cluster.

Rounds in Greece and Switzerland led to another spike in defence and dual-use technology funding. Traditionally, these types of investments have been hidden in government programs, but their appearance in venture deal flow signals a shift. More geopolitical pressure is forcing such focuses into the mainstream investment map. For a region where venture capital has long avoided this space, it’s a notable signal.

Overheated seed: big checks, early risks

Seed rounds are usually a market’s cautious entry point. In August, this area was the most inflated. There are several instances where startups raised rounds that resembled Series A in size. That places a bit more risk on the part of investors. Cases like Phoebe in the UK (€15.6 million), which focused on an AI “immune system” for DevOps, or Maisa in France (€16 million), applying AI to health diagnostics, represent a shift.

Individually, rounds like Cariqa in Germany (€4 million) for EV charging or Vox AI in the Netherlands (€7.5 million) for autonomous drive-thru voice AI should look like outliers. When considered together, they signal that early-stage checks are inflating beyond the typical €2 to €5 million funding range. That could be a challenge for investors, as these early funding concentrations also signal a risk associated with the earliest cycle stage. For founders, it means a much higher bar, as larger seed rounds create more pressure to prove traction quickly.

Debt challenges venture’s monopoly

August also indicated that venture no longer holds exclusivity with growth capital. This was most clear in Italy, where Bending Spoons chose a nine-figure debt package over raising equity, and LIZY in Belgium raised €65 million in debt to expand its car-leasing platform. Activity like this makes a statement that mature European tech companies have financing options beyond traditional VC.

Public money reinforced the same pattern. CNES’s €31 million commitment into French spacetech or IPCEI’s semiconductor initiatives, as well as Italy’s Smart&Start programme, all represent how public funding can provide non-dilutive support for leading tech innovation. It means capital availability in Europe is diversifying as more debt and state programs challenge venture’s monopoly as the default path to scale.

August’s M&A: a turn to consolidation

August wasn’t a headline month for M&A activity. Instead, the character of that activity was worth noting as several mid-market startups were absorbed rather than scaling further. Germany’s lemon.markets and topi, Belgium’s Showpad, and Cambridge-based Congenica were all were all taken off the table, not as future leaders, but as assets folded into portfolio packages.

We didn’t see a surge of numbers from M&A in August, but rather a more general tone shift. Instead of startups seeking quick expansion, companies “tidied up” the industry as established brands acquired companies with traction, but no runway for independent growth. Such activity is a potent reminder that in Europe’s current cycle, exits for many ‘solid but not stellar’ startups are more likely to come through consolidation than through the next big round.

That shift is a double-edged sword for investors. Consolidation helps facilitate entry points to acquire useful technology and modestly valued teams, but it also results in fewer breakout stories. August’s M&A in Europe reminds us that “good, but not great” translates into “acquired, not scaled.”

Conclusion: from deals to directions

Even though there weren’t headline stories in August, it was still a busy month. Hundreds of interesting deals hit the European market. The value for investors was to consider the movement as a whole, rather than on an individual scale. When viewed this way, August highlights a system in motion.

The market is rebalancing itself. Instead of surging in one direction or another, we’re seeing more investors, founders, and governments testing multiple paths forward. Some, like clusters in the UK and diversified experiments in the CEE, are louder. Others like AI-driven tech in defence industries or debt over funding are quieter. Regardless, all are reshaping the cycle.

For us at Zubr Capital, that transformation is exactly where opportunity lies. Not in waiting for a new headline wave, but actively reading the undercurrents that may reveal how the next phase is being built.

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