Vienna, April 8, 2026 – Venionaire’s European Venture Sentiment Index tracks investment activity and sentiment among top European investors at the end of each quarter and provides an outlook on what the industry expects. In the first quarter of 2026, the European venture capital market experienced a turnaround. “While the investment volume has risen to around $21.3 billion, this amount is being spread across fewer and fewer companies,” explains Berthold Baurek-Karlic, CEO of Venionaire Capital AG. The outlook for the second quarter could hardly be worse.

The optimism of days gone by

At the start of the year, investors were still optimistic about 2026. This was also reflected in a projected EVSI index of 5.6. “Due to the tense situation in the Middle East and the uncertain U.S. strategy in this regard, this

optimism turned into concern and nervousness. At 4.4 points, the EVSI is well below expectations and has fallen below the neutral mark of 5 for the first time since early 2024,” said Baurek-Karlic. This trend is driven by significant declines in key market indicators. Startup valuations fell by 27.7 percent quarter-over-quarter, while the fundraising environment deteriorated by 45.1 percent. At the same time, investor activity (-10.7 percent) and deal flow (-13.6 percent) declined.

 

There is no sign of improvement in sight for the second quarter either. A projected EVSI of 4.3 is reflected in declines across key metrics. Startup valuations are falling by a further 18.1 percent, while the fundraising environment continues its downward spiral, down 25.9 percent. Investor activity (-32.1 percent) and reduced competition (-11.5 percent) also contribute to the projected decline in deal quality (-20.9 percent).

Immense implications for startups – AI as a lifeline?

“Investors are looking for predictability and security. Young companies with unpredictable revenue trends—if they have any at all—are not an attractive investment in the current climate. Instead, investors prefer established companies with predictable revenues and a stable market position. They continue to pay hefty valuations for these,” says Baurek-Karlic.

Methodology:

The “European Venture Sentiment Index” is a weighted index. The index focuses on valuations (whether startup stock prices in Europe are considered overvalued, neutral, or undervalued). Another key factor is the quality of the deal flow and investors’ ability or willingness to invest at present. It is based on a quarterly survey. Venionaire collects responses from a focus group and a smaller control group. These data sets are collected in two waves. Both groups include similar sets of key players from all major European startup hubs (including Switzerland and the United Kingdom).

This is evident from the size of investments in the largest markets. France (€47 million) saw the highest average deal size in the first quarter of 2026, followed by the United Kingdom (€37.8 million) and the Netherlands (€28.1 million). “The UK secured nearly 50 percent of all VC transactions at the start of the year. The main reason for this was a small number of strong investments in the AI and data sectors. In this sense, AI is no longer just a high-performing sector but is increasingly becoming a decisive factor in where and how capital is deployed across Europe.”

You can download the full European Venture Sentiment Index here.

About the Venionaire Group:

Venionaire Capital specializes in venture capital and private equity. Founded in 2012 and headquartered in Vienna, the firm’s experts provide ongoing support to corporations, mid-sized companies, and family offices on complex financing issues. The firm has particular expertise in the areas of innovation, high-tech, and growth companies (startups). In the niche areas of venture capital and private equity, services range from due diligence, company valuation, and deal structuring to fund management and traditional transaction support (M&A). The firm’s partners regularly invest themselves through the European Super Angels Club, which was founded in collaboration with partners from KPMG Austria. Learn more at www.venionaire.com

www.venionaire.com

 

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