Two Mega Deals Swallow Most of Europe’s €763M Tech Week

European tech startups raised more than €763 million across 35-plus funding deals last week, according to Tech.eu tracking, yet two rounds alone accounted for the overwhelming share of that capital. Stockholm’s Lovable closed a $400 million Series C that doubled its valuation to $13.3 billion, while UK air-defence firm Cambridge Aerospace raised $300 million at a $3.4 billion valuation. Software took €355.3 million, security €265.7 million and transportation €88.2 million. The UK led countries with €393.5 million and Sweden followed with €349.4 million; Denmark’s €9.5 million placed a distant third.

The rest of the continent’s startups shared what remained. That split is the story that matters more than the headline total.

Lovable and Cambridge Aerospace take nearly everything

Lovable, the Stockholm vibe-coding platform that turns plain-language prompts into working software, announced its $400 million Series C at a $13.3 billion valuation on 12 August. Menlo Ventures led and the Scaleup Europe Fund co-led. Returning and new backers included Balderton Capital, Carmignac, Tencent, World Innovation Lab, Accel, CapitalG, DST Global and others. The company said it had already hit a $500 million annualised revenue run rate earlier in the summer and was tracking toward $600 million. Users have created more than 60 million projects; Lovable-built apps draw over 900 million monthly visits. Nearly two-thirds of Fortune 500 employees now sit inside companies that use the product.

Cambridge Aerospace, founded only in 2024, closed its $300 million Series C days earlier at $3.4 billion. DFJ Growth led, with Lux Capital, Accel, Lakestar and others participating. The firm builds low-cost interceptors. Its Skyhammer system counters drones and cruise missiles and is already in production, with a target of 2,500 units a month by March 2027. A rocket-powered Starhammer for higher-speed threats is due in 2027. Proceeds fund a large solid-rocket-motor factory in Norfolk and existing Ministry of Defence contracts. The company has raised more than $630 million total since launch and holds contracts with UK forces and Gulf partners, plus testing interest from the US Army.

Together the two rounds represent roughly €650 million of the week’s €763 million total once currency is aligned. Vertical Aerospace added a further £74 million for its flying-taxi programme, per Tech.eu’s summary of UK tech coverage. Everything else sat well below €30 million.

Software and security leave little for the field

Industry totals from Tech.eu confirm the skew. Software’s €355.3 million was dominated by Lovable. Security’s €265.7 million was essentially Cambridge Aerospace plus a handful of smaller cyber and AI-security cheques such as Mindgard’s €26 million for enterprise AI system protection and Cytix’s $7 million Series A against AI-driven software risks. Transportation’s €88.2 million captured Vertical and a few mobility or logistics names.

• Software: €355.3 million, almost entirely Lovable plus mid-size AI tools
• Security / defence tech: €265.7 million, Cambridge Aerospace the clear anchor
• Transportation: €88.2 million, Vertical Aerospace the standout
• All other verticals combined: the remaining single-digit tens of millions

Smaller rounds still appeared: Entravel Group $7.5 million in Denmark, Palette €3 million pre-seed for an AI-native team OS, Watercycle Technologies £3 million for UK lithium, Millow €2 million for mycelium protein, and a long tail of sub-€2 million cheques across Spain, Switzerland, Finland, Germany and Portugal. Grants from Innovate UK and others filled some gaps. The pattern matches the H1 2026 picture Tech.eu published in July: €44.1 billion raised across just over 1,740 deals, capital up from the 2025 trough while deal count hit a six-year low.

UK and Sweden leave the rest of Europe behind

Country totals tell the same concentration story. The UK’s €393.5 million and Sweden’s €349.4 million together exceeded €740 million. Denmark’s €9.5 million ranked third. Every other tracked market contributed residual sums. That mirrors H1, when the UK alone took €18.7 billion, more than three times Germany’s total, while Sweden punched above its weight on a handful of large AI and deep-tech rounds.

This week’s geography also fits the broader dual tracks of European tech finance this year, where late-stage equity and specialised debt cluster in a few cities while early-stage activity fragments. London and Stockholm absorbed the week’s oxygen. Founders outside those corridors faced a thinner market for both equity and attention.

Scaleup Europe’s early bet lands on a proven winner

Lovable’s round carried an extra policy signal. The co-lead was the new €5 billion Scaleup Europe Fund managed by EQT, an EU initiative designed to keep strategic European scale-ups from needing to leave the continent for growth capital. The European Commission has committed €1 billion; founding investors include Novo Holdings, Danish EIFO, CriteriaCaixa, Santander/Mouro, Italian foundations, APG for ABP, Wallenberg Investments and Allianz. First investments were slated for autumn 2026 after the fund’s legal close. Lovable appears among the earliest high-profile deployments.

Anton, Fabian, and the Lovable team have built one of the most ambitious and fastest-growing AI companies we’ve seen. They prove that Europe has no shortage of exceptional founders. We’re excited to co-lead this investment in Lovable through the Scaleup Europe Fund, which reflects exactly why the Fund was established: to help Europe’s most ambitious technology companies become global leaders.

Victor Englesson, Partner at EQT and Co-Head of the Scaleup Europe Fund, said that in the company’s announcement. Menlo’s Matt Murphy called Lovable one of the most generational companies of the AI era. Crowd reaction on X immediately noted the tension: the fund is backing a company that had already raised hundreds of millions from global investors and could likely do so again, rather than a firm that could not clear a $100 million-plus round without public-side capital. Tencent’s participation alongside the EU vehicle only sharpened the point for some observers. The policy goal of retaining European winners is real; whether the capital reaches the next tier of under-funded scale-ups remains the open test.

Defence capital is moving on a parallel public-private track. Cambridge Aerospace’s round sits alongside other European efforts, including Airbus-backed European defense fund activity that has begun placing early bets on dual-use and air-defence technologies.

Exits and M&A keep moving while equity thins

Tech.eu logged more than ten exits, mergers and acquisitions in the same window. Duolingo bought UK animation studio Animade. Radar Healthcare took Cemplicity. Again acquired Geno to pair AI discovery with biomanufacturing. Fortino Capital took a majority stake in Operations1. VAFO Group bought Pets Deli. TIMOCOM acquired Aparkado. ARO and TalkTalk Business merged into a £200 million tech group. Berlin’s omni:us went to adesso. Smaller deals included Basefy’s purchase of Maxeo.ai in Türkiye and several Swiss and Danish bolt-ons.

The volume of M&A relative to the sparse mid-market equity rounds is consistent with a market where later-stage capital is scarce outside the AI and defence hotspots. Buyers are consolidating while pure-play growth equity stays selective.

1. 12 August 2026, Lovable announces $400M Series C at $13.3B
2. 10 August 2026, Cambridge Aerospace closes $300M Series C at $3.4B
3. Week of 10-16 August, Vertical Aerospace £74M, Mindgard €26M, multiple sub-€10M rounds and 10-plus M&A events
4. H1 2026 baseline, €44.1B raised across ~1,740 deals, deal count at six-year low

Readers who want the full weekly ledger can check the free Tech.eu Funding Explorer for deal tracking, which the outlet updates continuously.

The concentration leaves a thinner base underneath

Last week’s €763 million looks healthy until the distribution is examined. Two companies in two countries took the large majority. AI software and low-cost air defence proved they can still command global cheques and top-tier valuations. Public European growth capital is now participating at that same tier. The long list of €1-3 million rounds and the quiet M&A activity show the rest of the market still operates, yet the oxygen is thinner.

H1 already established the fewer-deals, larger-bets pattern. This week simply made the arithmetic impossible to miss. Founders outside the current AI and defence sweet spots face a market that rewards proof of extreme traction or strategic relevance to national security and keeps everyone else waiting longer for smaller tickets. The Scaleup Europe Fund’s early choice will be watched as a signal of whether that top-tier bias is temporary or structural.

For now the scoreboard is clear. Lovable and Cambridge Aerospace defined the week. Almost everyone else shared the remainder.