Startup Europe — The Sifted Podcast Can Europe build AI champions?
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Nov 6, 2025 Jonny Sinclair, head of research at Sifted, and Kai Nicol-Schwarz, senior reporter, dive into Europe's AI landscape. They reveal that funding for AI startups is booming, with €8.9 billion this year alone. Discussing France's AI hub status, they question whether it has plateaued against the rising prominence of London. The duo also highlights the dismal success rate of GenAI pilots and the critical role of specialized roles like forward-deployed engineers in ensuring effective deployment. They conclude with a debate on the potential AI bubble and its impact on market dynamics.
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Rising Second Wave Of AI Startups
- Europe now has a fast-growing second wave of AI-native startups focused on products under $1bn in valuation.
- Many are lean (avg headcount 75) and raising quickly, showing investor appetite and speed of company creation.
London Leading The Next Wave
- The UK, France and Germany account for 78% of top AI startups, with London leading this next wave.
- Paris still hosts big unicorns but the new ranking skews more London-heavy among promising younger firms.
Vertical Apps Offer Stronger Moats
- Most promising startups are at the application layer, especially vertical industry apps that build deeper moats.
- Horizontal AI plays face greater risk from model updates by big labs eroding defensibility.