There's a persistent assumption in venture circles that serious AI companies come from San Francisco, and maybe New York if you're being generous. The data tells a different story.

Sifted's inaugural AI 100—a ranking of Europe's most promising AI startups released in October 2025—reveals an ecosystem that's younger, faster-moving, and better capitalized than the conventional wisdom suggests. The 100 companies on the list have raised €4.4 billion collectively. Their average founding year is 2022. This isn't a mature market being disrupted; it's a new one being built.

Why This Matters for Founders

If you're building an AI company outside the US, you're not operating at a disadvantage—you're operating in a different market with different dynamics. European AI startups are carving out defensible positions in enterprise AI, developer infrastructure, vertical applications in healthcare and legal, and increasingly in foundational models. The concentration is in the UK, France, and Germany, but the opportunity extends across the continent.

The funding environment reflects this. Seed and Series A rounds remain active, with investors seeking early-stage exposure before companies get expensive. Later-stage rounds have become more selective—investors want clearer paths to profitability—but that discipline benefits founders who can demonstrate real traction, not just growth.

"This year will be remembered as the year AI moved from experimentation to deployment in enterprise environments. The startups that figure out how to deliver measurable ROI will be the winners."

— Sifted AI 100 Report, October 2025

Why This Matters for Investors

For investors, Europe represents a different risk-reward profile than US AI. Valuations are generally more reasonable. Competition for deals is less intense. And the talent pool—particularly in research—is world-class. The challenges are real: compute access is harder, later-stage capital is scarcer, and the EU AI Act creates compliance overhead. But those challenges also create barriers to entry that protect the companies who navigate them.

Corporate VCs are increasingly active in the space, which signals both validation and potential exit paths. Strategic acquirers are paying attention to European AI in ways they weren't two years ago.

The Takeaway

The AI 100 list isn't just a ranking—it's evidence that the AI opportunity is genuinely global. For founders building outside the US, that's validation. For investors with a global mandate, it's a reminder that the best risk-adjusted returns may not be in the most crowded markets.

Source: Sifted, "The AI 100: Europe's Most Promising AI Startups," October 2025. Sifted is a European tech media company backed by the Financial Times.