10 VCs to Watch That are Investing in European AI

Written by Tom Driver

Following ChatGPT rocking the world of artificial intelligence (AI) last year, the demand for AI investment is as great as ever. Historically bought out by foreign investors from the United States and Asia, AI start-ups from Europe are beginning to resist.

Following the EU’s launch of the European Tech Champions Initiative, the hope is that European innovators will finally be able to step out of the shadows of long-standing tech hubs such as Silicon Valley.

Boasting an initial €3.75 billion of capital to tackle the European scale-up gap, the initiative will help boost European AI development to a level that venture capital (VC) firms simply cannot ignore.

Here is a look at the top 10 European AI-investing VC firms to look out for in 2023:

Btov Partners

With offices in Germany, Switzerland, and Luxembourg, Btov Partners is a VC firm focused on early-stage investments into the digital and industrial technology sectors. On their website, they brand themselves as “the first backer of outstanding entrepreneurs and non-obvious opportunities in Europe.”

Last year, the firm led a €1.1 million funding round supporting Textcortex, a Berlin-based AI writing assistant. Launched in 2021, the start-up seeks to boost workspace productivity by integrating with existing GAI tools.

Having also invested in the groundbreaking translation tool, DeepL, Btov Partners have proven they have an eye for budding European AI. It would be wise to track their progress across 2023.

Sequoia Capital

Of course, the biggest VC firms won’t be turning a blind eye to the AI hype. In late 2022, Sequoia Capital displayed great faith in generative AI (GAI), releasing a market map of GAI companies and start-ups.

In a post which can be found on their website, Sequoia partners Sonya Huang and Pat Grady wrote, “Every industry that requires humans to create original work—from social media to gaming, advertising to architecture, coding to graphic design, product design to law, marketing to sales—is up for reinvention.”

In March last year, Sequoia called European seed-stage innovators to join its new, European-focused accelerator, Arc. Part of its first cohort is Synativ, a London-based start-up that uses the latest research in generative AI to produce data images to be used in several industries.

With over $85 billion of assets under management, Sequoia’s increased focus on European GAI deserves plenty of attention.

Impetus Capital

Based in Sofia, Bulgaria, Impetus Capital is an early-stage VC firm supporting seed and Series A start-ups. They seek innovative models with little-to-no competition in their markets.

Just last month, Impetus co-led a €2.5 million funding round for Transmetrics, a Sofia-based AI platform that optimises logistics planning and asset management. It uses a combination of automated data extraction and machine learning algorithms to enrich its data quality.

Partnering with the European Innovation Council Fund to support Transmetrics, Impetus Capital supports European AI from within the continent, contributing to Europe’s exponential AI-related growth.

TheVentureCity

TheVentureCity is a global, early-stage VC firm, using data insights to invest in start-ups seeking product-led growth. With an office in Madrid, this firm is certainly tapped into the European AI scene.

In 2021, TheVentureCity led a €2.5 million funding package handed to Beams, a social media app which trades followers and likes for authentic conversations via audio messaging. Beams have recently integrated AI into their product, analysing voice responses to provide personalised insights.

Given TheVentureCity’s portfolio companies have raised $1.2 billion over the last five years, the firm is absolutely one to watch in 2023.

Biometric Ventures

Based in Prague, Biometric Ventures is a VC firm focused on early-stage start-ups in the field of biometrics and AI. This company is actually a branch of the Slovakian start-up Innovatrics, a provider of biometric solutions for governments and enterprises, produced using AI models.

Innovatrics’ products are used in more than 80 countries by over one billion people, founding its own VC firm in 2020. Biometric Ventures have reported two start-ups that have developed successfully, including Ageware, an age verification software.

Although the focus is broadly on biometrics technology, AI is increasingly incorporated into biometric innovation. For example, AI simplifies facial recognition by computers through analysing facial features and matching them with a database, as is the case in Ageware.

A European AI-utilising start-up founding its own VC firm represents a desire to expand the industry. It will be very interesting to see where else Biometric Ventures invests in 2023.

Lightspeed Venture Partners

Another more established name in the VC world, Lightspeed Venture…