One quarter can spark headlines, but a series of quarters reveals the underlying market trend. This insight drives Zubr Capital’s Q2 2026 overview of European tech financing. While Q1 already showed investors turning more selective, deploying bigger checks into strategic niches and exposing an uneven startup landscape, Q2 continued along the same trajectory.
Strategic sectors draw funds and facilities, not just big cheques
Large funding rounds highlight strategic sectors, yet they do not automatically ensure market backing when capital needs become more complex or long‑term. In Q1, sizable company rounds signaled which strategic areas attracted investor interest. By Q2, the funding landscape broadened beyond those initial big checks, with growth‑capital vehicles, public equity sources, guarantees, and credit facilities playing a larger role.
Part of this demand arose because strategic firms needed more funding than Europe’s conventional venture market could provide. For instance, EIFO allocated €200 million to the Scaleup Europe Fund, expanding larger growth‑capital avenues for European tech firms.
Public sector involvement also increased. The British Business Bank directed over €695 million of equity into British science‑and‑tech scaleups, offering state‑backed support as both an ecosystem enabler and a direct market player. Defence followed a similar pattern, with the planned €500 million E2D growth fund targeting Europe’s dual‑use and DefenceTech scaling gap. Together, these moves show how the early Q1 interest in strategic sectors evolved into a structured capital framework by Q2.
One clean equity round doesn’t tell the whole story
A further Q2 indicator was the growing role of hybrid capital in European tech financing. Debt, grants, public support, and strategic investment have been appearing beside equity rounds for several quarters, and Q2 made this blended funding mix especially clear. Companies now require capital for purposes beyond product development and market expansion.
Hybrid financing is increasingly underpinning infrastructure in AI, space, climate, and energy. Sectors such as deep‑tech hardware typically need physical assets, which translate into higher upfront costs, longer rollout timelines, and risk‑sharing mechanisms that traditional venture capital alone cannot accommodate.
Nscale added another €670 million to its AI data‑centre infrastructure in Norway. ICEYE obtained a €300 million revolving credit facility, granting flexibility in space and sovereign‑intelligence markets due to the high cost of its assets and worldwide deployment. InSoil secured a €120 million senior‑secured credit facility, backed by an EIF guarantee through InvestEU, combining debt and public risk‑sharing rather than relying solely on equity. Microamp received a €6.5 million EIC package divided between grant funding and EIC Fund equity.
Although hybrid capital is not a novel concept, Q2 delivered more pronounced and visible examples. Firms that require physical infrastructure, tangible assets, and risk‑sharing arrangements cannot be adequately served by a single straightforward equity round; hybrid funding bridges those gaps.
DefenceTech: From validated category to funded market
In Q1, the indication was that DefenceTech was transitioning from a niche specialty with only a handful of specialist investors to a validated sector drawing capital at various stages.
Q2 reinforced this shift, making the DefenceTech capital structure more apparent. Germany’s Quantum Systems, an unmanned‑systems DefenceTech firm, showed the sector can now support a €1 billion Series D round. Meanwhile, Earlybird and AVP’s planned €500 million E2D growth fund targets sector‑specific financing gaps, offering larger checks for later‑stage dual‑use companies.
Public capital also entered DefenceTech financing stacks. The EIF Defence Equity Facility 2.0 launched with an initial €1 billion target as a fund‑of‑funds for defence‑ and cybersecurity‑focused VC, private equity, private credit, and infrastructure funds. The EIC STEP Scale‑Up Defence call introduced a more direct equity channel, offering up to €30 million per company. At the project level, the European Defence Fund allocated €1.07 billion across 57 initiatives, covering AI, cyber defence, drones, counter‑drone systems, and space missions.
While Q1 hinted that investors were open to backing DefenceTech at various stages, the swift buildup of infrastructure and support capital in Q2 points to a more resilient market emerging.
Maturing DeepTech: Quantum moves from lab curiosity to investment cluster
Quantum computing has moved beyond a distant scientific promise. What once seemed like a ‘blue‑sky’ aspiration a decade away is now drawing substantial, concrete investment, and European investors are no longer reluctant to explore it.
IQM Quantum Computers’ €275 million Series B round highlighted a wider deep‑tech trend, especially when considered alongside sizable financings in photonics, advanced materials, and other research‑intensive technologies. Investors now view quantum computing as a near‑term opportunity rather than a distant future prospect.
Q2 reinforced the view that the quantum stack is evolving quickly. Oxford Quantum Circuits secured €301 million in Europe’s largest private funding round for a quantum computing firm. QuantWare raised €152 million for quantum processors and manufacturing infrastructure. In France, Quobly closed a €115 million Series A to industrialise silicon‑based quantum computers and bring its first commercial product to market.
Hardware attracted considerable investor interest, as did software and enabling technologies. Algorithmiq raised €18 million for quantum software and relocated its global headquarters from Helsinki to Milan. Smaller contributors also gained notice, with FrostByte securing €1.3 million for cryogenic electronics used across many quantum‑technology developments.
These Q2 developments reveal a far more defined quantum investment cluster in Europe than existed a year earlier. The trend extends beyond bigger rounds to heightened activity across varied computing platforms, processors, and software.
Geography split revisited: The UK still leads, but CEE is no longer just an experiment garden
A year earlier, the UK dominated European tech funding with the largest deals, whereas Central and Eastern Europe (CEE) concentrated on smaller, variety‑driven investments typically under €5 million. Q2 preserved this geographic split but altered its significance.
In the UK, the biggest signals went beyond single company rounds. Oxford Quantum Circuits’ €301 million Series C grabbed headlines, while Mouro Capital Fund III achieved a €343.7 million first close, raising Mouro Capital’s total commitments to €859 million. Transition Ventures Fund II closed at €128 million, lifting its AUM past €257 million. New funds from Lansdowne Partners, Tapestry VC, and Osney Capital also closed during the quarter, with the British Business Bank serving as a major backer in several. The UK continues to write the largest checks and possesses a deeper capital base, supported by a more robust funding infrastructure.
CEE stayed quieter but followed a similar pattern. Prague‑based Wultra raised €6.8 million, and Ljubljana’s DDD Invoices secured €1.31 million. Most regional deals remained modest and exploratory, with a few notable exceptions. Viktor, based in Warsaw and Munich, closed a €64.7 million Series A; Prague’s EquiLibre Technologies was valued above €438 million; and Vilnius‑based InSoil, noted earlier, obtained a €120 million credit facility backed by an EIF guarantee via InvestEU. These transactions move beyond the experimental stage.
Q2 indicates that CEE is beginning to attract dedicated capital for the same strategic themes. Although it still lags behind the UK in scale, the region is moving past mere experiments. When the EIF and Poland’s BGK pledged €85 million to three Polish venture funds — Expeditions (early‑stage defence), Balnord (frontier and dual‑use tech), and Cogito Capital Partners (growth‑stage AI and fintech) — the narrative shifted to dedicated regional backing of strategic sectors.
The strategic tech capital race: US strategics find a route into European scaleups
As Europe pools more capital around AI infrastructure, defence, and deep tech, recent activity shows direct US strategic capital flowing into the region, bypassing European venture funds as intermediaries. This was evident in NEURA Robotics’ up‑to‑€1.2 billion Series C, which featured Tether alongside US strategic partners Qualcomm, Amazon, and NVIDIA. QuantWare’s €152 million round included Intel Capital and In‑Q‑Tel, the latter tied to US intelligence‑community venture activity. Oxford Quantum Circuits’ €301 million Series C also illustrated the trend, with Alpha Edison joining the wider investor syndicate.
US corporate and, in certain instances, state‑linked capital have taken direct roles in European robotics and quantum hardware. These sectors demand larger funds, public support, and dedicated facilities, and US strategic capital is now entering them straight‑away. What previously appeared as early‑stage, fund‑mediated interest has evolved into direct US involvement in Q2. Even when Europe attempts to retain strategic capital domestically, US strategics are finding pathways into its emerging and promising scaleups.
Europe can build strategic tech winners. Can it keep them?
Q1 showed where European tech capital concentrates, while Q2 unveiled how that infrastructure and support are being assembled. The ensuing question is whether these firms can scale on European terms.
Developments in AI infrastructure, DefenceTech, and quantum are now backed by a mix of funds, facilities, guarantees, public equity channels, and strategic investors — not just isolated, large rounds. As these growth signals persist, the providers of capital will determine the scaling environment for companies. Transatlantic dynamics remain important, especially as Europe expands its capital base around home‑grown strategic firms.
The issue is not whether Europe can create strategic tech winners — Q2 proved it can. Rather, the question is whether Europe can supply sufficient capital infrastructure to enable those winners to scale independently.
Oleg Khusaenov, CEO & Founder of Zubr Capital