April arrived with first-quarter data in hand and a more nuanced reading than the headline figures might suggest. European investment volumes reached record levels, but the distribution beneath the surface tells a different story: fewer deals, larger tickets and a level of selectivity that no longer seems temporary. As capital reorders its priorities, companies able to demonstrate real utility in strategic sectors are gaining weight: from applied AI and deeptech to health, care and technological infrastructure.
$25.7 billion across 1,939 deals: Europe remains resilient, but capital is concentrating
According to KPMG, European VC-backed companies raised $25.7 billion across 1,939 deals during the first quarter of 2026. The figure confirms the resilience of the European ecosystem but also points to a more demanding reality: capital remains available, although it is increasingly concentrated in more mature companies, larger rounds and models with more defensible market positions.
The quarter was driven by a record number of megadeals, meaning individual transactions of more than $1 billion. This lifted total investment volumes but does not necessarily point to a broad-based market recovery. Activity remained selective, with particular interest in AI, defense tech, infrastructure and dual-use technologies, while the exit environment continued to be limited, with M&A playing a greater role than IPOs.
The reading for startups and investors is clear: Europe is not short of capital, but the bar is higher. Companies able to demonstrate scale, efficiency, traction and a defensible thesis are better positioned; those still relying on overly general narratives face a more difficult environment in a market that rewards fewer promises and more evidence.
Eight companies, €146.5 million: the EIC signals which European deeptech companies are ready to scale
On 27 April, the European Innovation Council (EIC) announced the selection of eight new companies as candidates to receive funding under the STEP Scale Up instrument, with a combined equity investment of up to €146.5 million and individual tickets ranging from €10 million to €30 million per company.
The selected companies operate in deeptech, biotechnology and strategic technological infrastructure: exactly the type of companies that often struggle most to attract private capital in the transition from technological validation to real growth. At this stage, risk remains high, development cycles are long and financing needs can exceed what many funds are willing to take on alone.
The relevant reading is not only the size of the funding, but the type of signal the EIC is sending. By selecting these companies, the institution is not only providing capital: it is also validating their strategic potential and can help attract additional private co-investors. In a more selective European market, this type of backing can help ensure that high-impact technologies do not get blocked just before crossing the scale-up threshold.
The home as care infrastructure: the convergence capital has already detected
April brought two deals that, viewed separately, look like growth rounds; viewed together, they form a thesis. TeiaCare raised €7 million to scale its care monitoring and optimisation platform across nursing homes, rehabilitation, dementia care and home care, with planned expansion in Spain and France.
Patronus closed €11 million for an emergency device and family app designed to support the safety and independence of older people, without requiring specific infrastructure in the home. The two deals converge around the same reading: the home is no longer only a space of consumption but is becoming care infrastructure. Models that combine lightweight hardware, software, data and care or family networks are generating increasing investor interest.
This convergence between longevity, independence and distributed care directly connects the health and home verticals, opening relevant angles for care and insurance models that, until now, had often operated separately.
The AI attracting capital in European healthcare is no longer promising: it is executing
Base4 Biosciences closed a $1 million pre-seed round to develop an AI platform focused on early diagnosis and preventive medicine, backed by funds including Kfund, Baobab Ventures, Itnig and Masia VC. The deal fits an increasingly clear pattern in healthtech: artificial intelligence gains traction when it is applied to specific problems in regulated sectors, where efficiency, precision and scalability have a direct impact.
In parallel, neurotech showed several relevant signals. Newfund launched a €60 million fund dedicated to brain technologies; Audicin raised $1.9 million to advance real-time nervous system regulation; and Cerca Magnetics closed €4.3 million to develop wearable brain imaging based on quantum sensing. This is not yet a mass market, but it is a signal of specialisation worth tracking: mental health, neurodiagnostics and neuromodulation are starting to move out of the experimental space and closer to an investable thesis, especially when they intersect with ageing, dependency and rehabilitation.
The common reading is that AI starts to attract capital when it becomes an operational layer within concrete solutions: earlier diagnosis, better clinical tools, real-time monitoring or technologies capable of reducing friction in complex healthcare systems. In healthcare, this technological capability will also have to coexist with an increasingly demanding framework around AI, data and regulatory compliance, from the AI Act to the European Health Data Space (EHDS). At that intersection, the ability to combine technology, data, clinical evidence and regulation can become a competitive advantage as important as the product itself.
April closes with a reading that the quarter’s data confirms and the month’s deals illustrate. European capital is concentrating its conviction in fewer companies and in models with demonstrated utility. Public instruments such as STEP Scale Up are identifying and backing companies with the technology to scale, but which still struggle to find enough private capital at a critical stage. And the convergence between health, home and ageing is beginning to produce deals that, viewed together, no longer look like isolated cases: they look like a category.
Ultimately, the European ecosystem has not lost its investment appetite; it has gained something more useful: discipline, focus and judgment.
If you found this analysis useful, come back to the GCO Ventures blog next month: we will continue reading the ecosystem with the same critical lens.