Every week I track the most consequential developments across the European startup ecosystem so that investors, bankers and asset managers can separate signal from noise. This week’s deal flow was particularly dense, spanning defence technology, AI infrastructure, fintech and clean energy — sectors that are increasingly moving from the periphery of institutional portfolios to the centre. Here is what I believe deserves your attention.
The headline deal of the week belongs to TEKEVER, the Portuguese autonomous drone specialist that closed a $580 million Series D led by UC Investments and Baillie Gifford, pushing its valuation to $6.4 billion. The involvement of two highly regarded institutional investors signals that European defence tech has matured well beyond the venture-stage risk profile — this is now a legitimate asset class for large allocators.
Reinforcing that theme, Terasi secured an €11 million Series A from the NATO Investment Fund, while Archangel VC formalised a three-year partnership with the Estonian Defence Forces to accelerate deal flow across the Baltic defence tech corridor. The convergence of sovereign capital and institutional venture capital in this space is a structural shift that M&A desks and alternative asset managers cannot afford to ignore.
On the M&A front, the most financially significant transaction was Schneider Electric’s agreement to acquire Shelly Group, the Sofia-based IoT and smart-building solutions provider, for approximately €1.2 billion at €70 per share. For the Bulgarian tech ecosystem, this is a landmark exit; for the broader market, it underscores how European strategic buyers are increasingly deploying capital to acquire hardware-software convergence plays that accelerate their own product roadmaps.
In AI, the week was dominated by Mistral’s acquisition of marketing automation firm Pimento for roughly €13 million — its third acquisition this year and a clear signal that the French AI champion is pivoting from model provider to full-stack enterprise AI vendor. Coming immediately after a €3 billion growth-capital round, the Pimento deal illustrates how well-capitalised AI platforms are using M&A to compress their go-to-market timelines rather than build organically.
Lithuania’s Oxylabs deserves a spotlight of its own: the web-intelligence startup, which had been entirely bootstrapped since 2015, raised €113.6 million from Warburg Pincus at a €3.1 billion valuation, instantly becoming Lithuania’s newest unicorn. The fact that a first-time external fundraise at this scale attracted a firm of Warburg Pincus’s calibre speaks volumes about the depth of profitable, capital-efficient businesses quietly maturing across Central and Eastern Europe.
Swiss fabless semiconductor company Kandou raised $225 million to scale production of its AI connectivity chips, a reminder that Europe’s hardware ambitions in the AI infrastructure race are far from negligible. For investors tracking the semiconductor supply chain, Kandou represents a credible European bet in a segment almost entirely dominated by US and Asian players.
The legal AI space produced one of the week’s most structurally interesting deals: Berlin-based Noxtua raised over €100 million in a Series C, with publishing group C.H.BECK taking a majority stake. This is a notable example of a traditional media and publishing group executing a vertical AI acquisition strategy — a playbook I expect to see replicated across professional services publishing in the coming quarters.
Metycle, the Cologne-based recycled metals platform, secured a €131.7 million credit facility from Rivonia Road Capital to finance larger copper and aluminium trades across 15 countries. In an environment where the circular economy narrative is increasingly backed by hard commodity economics, this deal illustrates how alternative lenders are stepping in to provide structured working-capital solutions to marketplace platforms operating in real assets.
Finally, Bird (formerly MessageBird) secured a $450 million debt package led by JP Morgan, Capital One and Citi — not to fuel growth, but to provide shareholder liquidity as the company restructures around AI messaging after cutting its workforce from over 1,000 to 120. This is a cautionary data point for SaaS valuations from the 2021 vintage and a reminder that debt markets are now active participants in startup restructuring processes.
Taken together, this week’s activity points to a European startup market that is bifurcating clearly: mega-rounds and institutional-grade exits at the top end, disciplined seed activity in AI and climate tech at the bottom, and a growing role for structured debt and strategic M&A in the middle. For capital markets professionals, the message is straightforward — European venture is no longer a sideshow, and the exit mechanisms are becoming considerably more sophisticated.
Maurizio Savino, Editor in Chief, EU Finance News