Since OpenAI released ChatGPT in 2022, AI has taken centre stage in startup hubs across the world — and 2024 showed no signs of a fizzle out.
In Europe, the past year saw scores of founders launching AI startups, with many VCs keenly looking to fund them. Atomico’s 2024 State of European Tech report found that a quarter of all deals under $5m were in AI and machine learning — more than any other theme, including energy and hardware.
Overall, European countries are on track to pump $11bn into AI startups in 2024, according to Atomico — a way off the $47bn invested in the US, but a significant jump from 2023, when funding amounted to about $6bn, and a ninefold increase over the last decade. In 2015, AI investment in Europe was just over $1bn.
In companies like autonomous vehicle scaleup Wayve in the UK, France’s LLM developer Mistral and German AI translation startup DeepL, Europe is starting to see serious players emerge in the field. But last year was not all hot fundraises and success stories. AI startups also suffered turbulent times — such as the exodus of senior execs from UK startup Stability AI and the loss of its CEO, as well as France’s H company seeing three cofounders leave just three months after raising a $220m seed round.
These were the key events that shaped the AI sector in Europe in 2024.
ElevenLabs becomes a unicorn
London-HQ’d ElevenLabs, which uses AI to generate artificial voices in multiple languages, kicked off the year with an $80m Series B co-led by Andreessen Horowitz, Nat Friedman and Daniel Gross — achieving a $1.1bn valuation.
Cofounded in 2022 by Polish engineers Mati Staniszewski and Piotr Dąbkowski, the company originally focused on dubbing, but is now finding traction in sectors like entertainment, gaming, media and conversational chatbots. Since launching, it has raised $101m from tier-one US VCs like Sequoia — and has become one of the hottest startups in voice AI.
Stability AI’s CEO steps down
London-based GenAI startup Stability AI announced in March that Emad Mostaque was stepping down from his position as CEO of the company. It followed a period of turbulence that saw a number of high-profile senior executives leaving the startup.
A few months later, Stability AI said that it had raised fresh capital from investors like US global VCs Coatue Management and Lightspeed — although it did not disclose the size of the round. Further Sifted reporting found that the startup had landed around $50m, but that this fell $30m short of a targeted $80m round.
Wayve raises Europe’s largest AI round
In May, UK autonomous vehicle (AV) scaleup Wayve raised a $1.05bn Series C from SoftBank, Nvidia and Microsoft — the largest ever round for an AI startup in Europe.
The company develops AI-powered software for AVs. It announced, a few months after its Series C, a partnership with Uber that saw the car-riding platform make a strategic investment into Wayve. The size of the investment was not disclosed.
DeepL hits a $2bn valuation
Riding the wave of a successful 2023, in which it secured unicorn valuation after raising a reported $100m round, German AI translation startup DeepL raised another $300m round in May at a $2bn valuation.
The startup has developed a GenAI model trained specifically for language translation, and says that it has a customer base of more than 100k organisations across the world.
Mistral becomes Europe’s most highly-valued AI startup
France’s buzzy AI scaleup Mistral continued to make headlines in 2024 as it secured, on its first-year anniversary, a €600m Series B (including €468m in equity funding), bringing total funds raised since launching in June 2023 to over €1bn.
The Series B round valued Mistral at €5.8bn — the highest valuation for an AI startup in Europe. The company builds large-language models (LLMs) that it says can rival the technologies developed by US tech giants like OpenAI — and it is considered Europe’s most serious competitor in the field.
Helsing raises a €450m Series C
One of Germany’s hottest AI scaleups Helsing secured a hefty €450m in Series C funding in July. The round was led by General Catalyst and was reported by Bloomberg to value the company at nearly €5bn.
Helsing develops AI software for use on the battlefield and more recently announced it was building its own attack drone. In the three years since it launched, it has raised nearly €800m while also securing the support of the German government, including a recent order to equip thousands of drones with its AI software to send to Ukraine.
The EU’s AI Act comes into force
On August 1 the EU’s long-anticipated AI Act entered into force — a text initiated in 2021 to regulate artificial intelligence and prevent misuses of the technology.
As the bloc’s first-ever legal framework on AI, the legislation received mixed reactions within the tech sector, with some worrying that the legislation would place an extra burden on startups in Europe and put them at a disadvantage compared to their competitors in the US.
Most businesses producing or deploying AI in the EU were given a two-year period of transition from the moment the Act came into force to comply with the new law.
AMD acquires Silo AI
Silicon Valley semiconductor company AMD announced in August that it had completed the acquisition of Helsinki-HQ’d AI lab Silo AI in a transaction valued at $665m — the biggest AI acquisition in Europe to date.
The Finnish startup helps businesses develop AI-powered tools for smart cities, smart devices, autonomous vehicles and industry 4.0. It has also developed its own LLMs focused on European languages.
H Company loses three cofounders
Paris-based H Company, which is building AI ‘agents’ that can complete tasks rather than simply respond to prompts, raised one of France’s biggest seed rounds ever in May — a $220m round led by US VC Accel. Three months later, it announced that three of the company’s five cofounders were leaving due to ‘operational differences’.
It left DeepMind alum Laurent Sifre and Charles Kantor, a former Stanford University computational mathematics researcher, to lead the startup. In November, H released its first product dubbed Runner H — an AI model that the startup says can turn instructions into actions.
Aleph Alpha pivots away from LLMs
With a $500m Series B secured at the end of 2023 to build LLMs, German scaleup Aleph Alpha was long considered a potential European competitor to OpenAI. But in September, the company announced that it was pivoting away from building and selling its own LLMs — and focusing on commercialising software services to help customers implement GenAI tools in their organisation.
Speaking at Sifted Summit in October, Aleph Alpha’s CEO Jonas Andrulis said that it was “hard to build a working business model’ around LLMs. In 2023, the company fell short of its revenue targets, bringing in a little under €1m after targeting €5.5m.
11x moves to the US
Japanese investment giant SoftBank told Sifted in September that UK-based 11x was one of Europe’s AI startups that it was watching closely — but just a few weeks later the company announced that it was moving its HQ from London to San Francisco.
The announcement came as the company, which builds AI-powered tools that do the job of sales development representatives, closed a $24m Series A. The startup’s head of growth Keith Fearon told Sifted at the time that the requirement to relocate came from “almost all of our investors”.
Just two months later, in November, 11x raised another $50m led by Andreessen Horowitz.
Poolside raises a $500m Series B
Poolside, a US-HQ’d startup that opened a base in France last year and has since grown a team in Europe, closed a $500m Series B at a $3bn valuation in October — ahead of publicly releasing its first product.
The startup, which is building a GenAI tool to help developers write software code, told Sifted at the time that it was getting ready to bring its model to market, and that it was currently testing the technology with users in Europe and the US.
Read the orginal article: https://sifted.eu/articles/2024-year-of-ai/
