Northvolt tops list of Europe's most-funded startups

Swedish lithium-ion battery maker Northvolt has topped a list of Europe's most-funded startups—with $5.5 billion raised to date—at a time when the median amount of VC capital raised by startups in the region continues to climb.

The year ahead is expected to remain challenging for startups looking to secure fresh funding as investors become more cautious with their capital. As a result, many will face cuts to valuations and harsher terms for their next rounds.

However, startups that do secure capital are pulling in bigger rounds. According to PitchBook data, the median amount raised in 2022 was €3.4 million, up from €2.6 million the year before.  
The growth in median VC raised was particularly notable in the very early stages with a 41.7% increase for angel and seed startups up to €1.7 million. Being the furthest away from exit, seed-stage companies are more insulated from macroeconomic conditions and also require less of a capital commitment from investors as deal sizes tend to be smaller.

Although the downturn has impacted late-stage startups the most, the median raised still increased by 10%. All 10 of Europe's most-funded startups fall in this category, with Northvolt leading the pack with $5.5 billion raised. Most recently, the Swedish startup raised $1.1 billion in the form of a convertible note from investors including AMF and Baillie Gifford.

Perhaps unsurprisingly, almost half of the most-funded European startups are in fintech. Fintech has historically been one of the most attractive sectors for VCs to invest in, resulting in particularly high deal sizes and valuations. Overexuberance in fintech, however, has caused the sector to be impacted more than others by the shift in the economic environment.

With $4.6 billion raised, Klarna comes in second place, having received capital from investors including Sequoia and Silver Lake. Two challenger banks, Revolut and N26, also appear on the list, despite neither having raised equity since 2021.

Featured image courtesy of Northvolt

This article originally appeared on PitchBook News