Although during the first quarter of this year, venture capital deal value had a good start. European VC deal value stood at €16.7bn for Q1 2025, a 13.1% year-on-year increase, said data firm Pitchbook in its Q1 2025 European Venture report, published on 11 April. VC deal value in Q1 2024 was €14.5bn.

That being said, “the first quarter of 2025 showcased signs of a more cautious environment and uncertainty felt by wider macroeconomics,” commented Navina Rajan, EMEA senior private capital analyst at Pitchbook. “Exit value also saw a soft start to the year. Despite recent market volatility, we are still expecting IPO activity to pick up in Europe as valuations and volatility remain within favourable thresholds for an IPO window.”

In Luxembourg, venture capital deal value in Q1 2025 came to €95.4m. That’s a far cry from the €5.8m of deal value seen in Q1 2024.

Deal count has been fairly stable over the last several quarters, said Pitchbook’s data: Q1 2025 saw eight VC deals, up from the five deals seen in Q1 2024.

When it comes to deal size, four deals were in the €1m to €5m range; two were in the €5 to €10m range; whilst the €10m to €25m range and the €25m+ category saw one deal each.

Three of the Luxembourg VC deals were in the software sector; three were in the commercial products and services sector; and two were in the IT hardware sector.

Artificial intelligence: top-ranked vertical in Europe

Looking at European VC activity overall by vertical, “AI moved into the top-ranked vertical by deal value as life sciences and fintech also showed resilience,’’ noted Rajan. “It is likely that activity and rankings will evolve as we move through the year.” Artificial intelligence and machine learning VC deal value came to €4.9bn in Q1 2025 (with 539 deals); fintech came in second place, with €4.8bn of deal value and 221 deals. Software-as-a-service, cryptocurrency/blockchain and life sciences rounded out the top five verticals.