E104 [AI-Translated] Burn Rate Intelligence #1 – European VC H1 2026 | Dealroom & PitchBook

00:00:00: The original podcast was recorded in

00:00:02: German.

00:00:03: This podcast was translated using Artificial Intelligence, Burnrate the Venture Insider Podcast

00:00:09: with Max Meister and Guy

00:00:10: Jufredi.

00:00:12: Hello and welcome to Burnrate – the VC Insider podcast!

00:00:16: I'm here talking with Guy Juffredi about a startup scene with focus on venture capital.

00:00:21: With episode one hundred four our new Wednesday format Burnrate intelligence starts today.

00:00:27: In these episodes, we take up current and relevant topics from the VC world put them in context.

00:00:32: And share the knowledge We have collectively built over more than thirty years of experience in the VC environment.

00:00:38: The Episodes are deliberately kept compact.

00:00:40: So a brief impulse A food for thought Or also a knowledge edge For middle-of-the week.

00:00:45: This podcast is sponsored by our partners Our Ventures & Wenger Vieli.

00:00:50: Yes Guy!

00:00:50: What's todays topic?

00:00:53: burn rate intelligence episode, we're taking apart the deal room report on VC financing in Europe.

00:01:21: Both show the same direction, significantly more capital than recently.

00:01:25: Deal room would even come to just under ninety billion dollars for the full year at that current pace!

00:01:31: Yes but behind these numbers lies a rather unusual market.

00:01:35: According to Pitchbook sixty percent of European VC Capital is now going into AI.

00:01:41: In US it's almost ninety percent.

00:01:44: That discrepancy... ...is still interesting and more than half of all the money invested sits in rounds above one hundred million euros.

00:01:52: Yes, these mega-rounds at the same time account for not even two percent of all deals.

00:01:56: so there's a lot of money but it's distributed anything but evenly on has to note.

00:02:02: And then also Switzerland.

00:02:03: yes The first half here looks significantly less encouraging.

00:02:07: One point two four five billion francs, that's around fifteen point five percent less than a year ago.

00:02:13: The number of financing rounds remained almost unchanged at one hundred twenty three.

00:02:18: however yes At the same time hardware is reaching a new record and for the first time VOD leads Zurich in invested capital.

00:02:26: Yes guy First A brief look at Europe

00:02:39: Of course, very nice numbers that we're allowed to read here.

00:02:42: But with the statement that the crisis in the European VC market is over I would be very cautious.

00:02:48: Yes, capital is back!

00:02:50: You can see it in an unambiguous and impressive way but by no means the whole market.

00:02:55: The most important number for me but the concentration behind it.

00:03:01: I mean, AI accounts for sixty percent of invested capital at pitch book and rounds above hundreds of millions account for fifty-five percent of capital even though they represent only one point eight percent of transactions At deal room.

00:03:13: a similar picture emerges over the last four quarters there forty five percent of capitol went into scale ups.

00:03:19: so round's about one hundred million dollars or euros.

00:03:22: And that means we're not experiencing a new, twenty-twenty one style market here where practically every segment goes up simultaneously.

00:03:29: What we are experiencing is more of winner takes most or winner take all.

00:03:33: market for small number companies especially in AI deep tech defense robotics and climate.

00:03:39: enormous sums suddenly available again.

00:03:41: but the average startup fundraising remains extremely demanding.

00:03:45: you can see it in largest rounds as well Isomorphic Labs Strega Wave Ineffable Intelligence Ligora.

00:03:53: Here, we're talking about billion-dollar financing rounds and deal room additionally lists Helsing and neural robotics in the second quarter.

00:04:00: so we already have a few companies that have simply done mega mega deals which is of course also good for Europe.

00:04:05: So one can say more money in this system but not automatically easier fundraising?

00:04:11: Yes exactly headline recovery Is Not The Same As Broad Based Recovery

00:04:18: Exactly.

00:04:18: Hmm, yes.

00:04:19: Sixty percent of capital in AI that's already quite striking.

00:04:23: is that healthy or the next excess being created right now?

00:04:26: Yes both things can actually be true and correct.

00:04:28: at the same time The numbers are spectacular.

00:04:31: In the first half year alone according to Pitchbook twenty six-and a half billion euros flowed into European A.I companies And thats more than all of twenty twenty five and AI responsible for more then forty per cent deal count But Europe is actually catching up in this area.

00:04:49: It's just catching up now, one has to say.

00:04:52: the interesting comparison Is with the US there?

00:04:55: The concentration is much much more extreme.

00:04:58: We already touched on this briefly and our last Saturday episode.

00:05:02: AI accounts their according to pitchbook for eighty eight percent VC deal value by now And at the same time the valuations of American AI startups are massively higher.

00:05:14: The median primary valuation at the end of may was sixty four point two million euros in the US versus eight point three million euros.

00:05:22: You can interpret that now as a bubble risk, but you can also read it differently.

00:05:28: Europe still has considerable catch-up potential and AI that we can hopefully exploit And I wouldn't reduce your up to just AI now.

00:05:36: clean tech already comes to seven point for billion euros in first half.

00:05:40: That's also a nice figure and it is clearly above last year's pace.

00:05:44: And as mentioned, robotics advanced manufacturing space are major topics that we're financing with a lot of capital in Europe.

00:05:53: DAX specifically is interestingly less one-sided AI driven than the UK – Great Britain.

00:06:00: Pitchbook explicitly highlights here

00:06:08: Yes, exactly.

00:06:09: That's one also says Europe's biggest Achilles heel is growing so we can found companies but when they really get big We need American capital.

00:06:17: has anything changed about that?

00:06:19: yes not yet.

00:06:20: fundamentally European funds are admittedly raising more money again.

00:06:25: In the first half of the year it was just over eight billion euros According to pitch book after twenty-twenty five had been a historically weak fundraising here in Europe.

00:06:36: The median fund size is also rising slightly again from fifty to sixty million euros.

00:06:41: That's nice to see but at the same time, the significance of American capital is growing too.

00:06:47: US investors were involved in twenty-two percent of European deals.

00:06:51: In the first half.

00:06:52: these deals accounted for seventy percent Of total deal volume and pitch book now counts roughly as many active us As UK investors in the european market.

00:07:03: so you can see massively many investors who are actively here.

00:07:07: That's positive because Europe's best companies now have access to global capital, but strategically the question remains – Who owns Europe?

00:07:15: next generation of tech champions?

00:07:17: And yes perhaps something still missing for a complete picture… The exits!

00:07:21: In the first half year there was around thirty billion euros in exit value.

00:07:26: just under seventy percent came through acquisitions.

00:07:30: So the IPO market is fundamentally working again, but for VC financed European tech companies.

00:07:36: The big IPO wave isn't there yet?

00:07:38: But rather primarily M&A transactions yes.

00:07:42: and the Swiss number is initially also somewhat sobering max Isn't it?

00:07:48: Europe accelerates Switzerland loses fifteen point five percent.

00:07:51: what's going differently here?

00:07:53: Yes One grumbles a bit now, but one doesn't need to abstract this too strongly.

00:07:58: So one can say the volume falls due to earlier large financings... ...but the number of deals is almost

00:08:04: identical.".

00:08:05: We had one hundred twenty-three financing rounds in first half versus one hundred and twenty four in prior year.

00:08:12: The decline from one point four seven four billion to one point two four five billion francs therefore comes primarily from the fact that some very large financings are simply missing this year.

00:08:25: For comparison, in twenty-twenty two there were still two point five eight six billion francs.

00:08:31: In just six months and you can see their how strongly individual rounds can influence the Swiss result at the end of the day.

00:08:40: this is particularly visible now with biotech large Biotech rounds which traditionally contribute a great deal to total volume in Switzerland we're largely absent.

00:08:50: in the first half an ICT also remained relatively weak.

00:08:55: But something very exciting is emerging elsewhere, one has to say.

00:08:59: Namely hardware startups have reached a new half-year record of around three hundred twenty four million francs more than sixty percent above the previous record.

00:09:10: these are companies around more efficient data centers aerospace and above all deep tech and physical AI companies.

00:09:17: that is where our fund Koyo capital is at home.

00:09:21: So less of a general decline than quite clear shift within the Swiss VC market.

00:09:26: Yes, and this shift can also be seen geographically.

00:09:29: Vaude suddenly leads Zürich EPFL Suddenly leads ETH.

00:09:33: That's something completely new.

00:09:34: I've never see that before either.

00:09:36: What happened there Max?

00:09:37: Yes!

00:09:38: That is already surprising number.

00:09:40: More then three hundred thirty million francs went to start-ups from the Canton of Vaude Roughly at level record years in twenty twenty one and twenty two.

00:09:49: Inevo quantifies it more precisely at around three hundred thirty six point six million francs.

00:09:55: And here too, hardware is behind it.

00:09:57: one has to say Three of the four Hardware companies among the ten largest Swiss financing rounds come From VOD, the EPFL-adjacent deep tech ecosystem is thus playing in exactly areas that investors are currently seeking across Europe.

00:10:14: and Zurich on other hand had historically speaking according to The Swiss Venture Capital Report a week half year.

00:10:20: Large biotech rounds were missing while at same time ICT financing stagnated.

00:10:27: Yes, and for me an important message is contained in that.

00:10:31: The competition between European startup hubs is currently changing.

00:10:35: right now it's less about who produces the most SaaS startups but who can produce companies that are technologically hard to copy?

00:10:42: In AI infrastructure robotics chips energy aerospace or life sciences.

00:10:48: And that's exactly where Switzerland has structural or comparative advantages.

00:10:52: yes For the founders in our audience, what do I take away from these six months?

00:10:58: From this numbers.

00:10:59: Yes i think money is available that's very important but selectivity has become a defining characteristic of the market.

00:11:05: you can see that in Europe also Switzerland.

00:11:08: so for founders that means my view good narrative simply no longer enough.

00:11:13: we've said at few times here on burn rate With the large rounds, we see either very strong technological differentiation or already clear scalability.

00:11:22: So anyone who needs capital for growth has to think internationally early on because especially with large European rounds US and other international investors are playing an increasingly important role.

00:11:33: And that's my conclusion from the European numbers.

00:11:36: For investors The Other Side is equally important.

00:11:39: Exits have to come back.

00:11:40: in Switzerland There were only twenty one exits up to mid-year.

00:11:44: That roughly as many as in the previous year.

00:11:46: And there you can also see how weak the previous here really was, twenty one exits good grief.

00:11:51: interesting is however that strategic investments have increased significantly and those frequently proceed an exit.

00:11:58: at the same time Swiss VCs continue to name fundraising has their biggest challenge.

00:12:03: nevertheless In The Current Survey they are more optimistic about the coming twelve months than They were a Year ago both regarding the market environment and their own investment activity as well as regarding exits.

00:12:15: My conclusion would therefore be Switzerland doesn't have a demand problem for innovation, it currently has above all a scale up and leakage problems.

00:12:24: if more of the strong deep tech companies manage large growth rounds in subsequent exits The currently rather mixed half year result can very quickly turn into a strong cycle again.

00:12:34: I'm very convinced of that, and thats also why i am not as negative as many commentators have been based on the numbers.

00:12:40: Yes one can say in last few weeks a number of larger financing rounds has been announced because they very likely were still closed in Q-II and we're just only now communicated at the start of Q-III.

00:12:56: Yes, on the first half We could actually summarize it like this Europe is back but very selectively

00:13:01: yes And Switzerland isn't really gone But currently In transition.

00:13:06: fewer large biotech rounds classic ICT but instead more hardware and deep tech?

00:13:12: Yes Of course.

00:13:13: above all that stands AI.

00:13:17: We also read it today on every pitch deck, but where AI is written on the label there isn't always AI inside.

00:13:22: sometimes It's simply a pretty good software company that uses AI somewhere in the process But very importantly its attracting of very large financing volume and is involved in almost every deal.

00:13:34: Yes exactly For me, as an investor it's clear everyone is looking at AI and alongside that there are very many exciting cases that also financeable but simply aren't being noticed.

00:13:46: That means for us investors that one also has to look a little beyond the obvious and maybe dare do something that doesn't appear attractive at first glance, but on second-look have quite lot of potential.

00:14:08: Thank you very much for listening.

00:14:10: That was the first time with Burn Rate Intelligence, The Wednesday edition!

00:14:13: We wish you a good second half of week.

00:14:16: take care and bye.