At , we are regularly asked to put numbers on something that is, by nature, hard to pin down: the health of an innovation ecosystem. Governments, corporates and investors all want the same thing: A benchmark that tells them how their country or region stacks up against the rest of the world.

The problem is that no two ecosystems look alike, and any methodology rigid enough to allow cross-country comparison risks flattening exactly the traits that make a place distinctive.

This is the tension we have been working on for years, refining a model that is standard enough to compare Boston with SĂŁo Paulo, Tel Aviv with Turin, yet flexible enough to capture what is genuinely different about each. This week in Seoul, we presented the latest application of that work: The Innovation Economy of South Korea. It’s a good occasion to lay out, briefly, how we think the exercise should be done.

Start from the Pyramid

Every innovation ecosystem can be represented as a pyramid. At the base sit startups: venture-backed technology companies still in the process of building and proving their business.

Move up and the base narrows into scaleups, or companies that have shown enough traction to raise more than $1 million in venture capital. Scaleups are the most structured, most visible output of an ecosystem, and for that reason they are among the best proxies for its maturity: You can plot their number, growth rate and sector mix against the Innovation Ecosystems Life Cycle Curve and get a reasonably honest read of where an ecosystem stands.

At the very top of the pyramid are the outliers that matter disproportionately: scalers and super-scalers, companies that have broken out of their home market and achieved real international scale. A handful of these can do more for a country’s innovation profile than thousands of early-stage startups —Ěýwhich is why counting them separately, rather than burying them in an aggregate “startup” number, is essential to any serious methodology.

Alongside this VC-backed pyramid runs a second, often under-measured population: innovative SMEs, or established, revenue-generating small and mid-sized companies that compete on technology and innovation rather than venture funding.

Ignore them and you miss a large part of the real economy’s innovation capacity, particularly in ecosystems — Korea among them — where corporate-led and government-backed innovation has historically mattered as much as the VC route. Many emerge as bootstrapped companies. Some remain independent, while others may eventually raise external funding and move upward into the startup and scaleup layers.

All these tech companies stem from the knowledge base generated by local universities and research centers. Together, these layers represent the technology supply of an ecosystem.

Why the supply side alone isn’t enough

Counting tech companies gives you the supply side of the equation. But supply only turns into economic impact when it meets demand, and demand is largely, though not exclusively, represented by corporates, both local and international.

Corporates benefit from the solutions developed by startups, scaleups and innovative tech companies, while also potentially supporting their industrialization and growth through acceleration programs, venture client models, CVC and M&A. This interaction between technology supply and corporate demand is what turns innovation into economic impact and company growth — which is why measuring it, not just the supply side, is essential.

The supply side also interacts with local, regional and global B2C markets: Consumer demand is the other half of the demand equation, particularly for companies whose growth path runs through the market rather than through a corporate relationship.

The evolution of an ecosystem is everywhere, fueled by capital and public support. Private capital comes from angels, VCs and CVCs, providing companies with the resources to develop, commercialize and scale. Public support comes through subsidies, grants and government programs, delivered either directly or indirectly through innovation agencies, ecosystem builders and other innovation brokers.

The stronger the connection between these different sources of capital and the companies sitting in the pyramid, the faster companies can move from one layer to the next. The less advanced an ecosystem is, the more public capital needs to be fueled into the ecosystem to bridge the gap.

When an ecosystem reaches critical mass

As a local ecosystem reaches a certain threshold in volume, density and quality of companies — typically the Star stage of the Innovation Ecosystems Life Cycle Curve — it starts attracting increasing interest from external players. Investors, multinational corporations and government agencies begin establishing a local presence, because proximity provides better access to talent, technology, deal flow, partnerships and market opportunities.

One concrete way to measure this external attractiveness is by counting corporate innovation outposts set up by multinationals, alongside government innovation outposts set up by foreign countries, regions or cities. It’s an indicator that tends to lag the ecosystem’s real progress by a couple of years, which makes it a useful confirmation metric rather than an early signal, but a valuable one nonetheless.

The Korean innovation pyramid

As for our latest count, 3,359 scaleups sit at the top of the South Korean innovation pyramid.

This makes South Korea the eighth-largest national innovation ecosystem in the world, with Seoul ranking as the 11th most developed ecosystem globally.

Below the scaleup layer sits a much larger base of approximately 10,000 startups, alongside an even broader base of approximately 25,000 technology companies (innovative SMEs) that are not venture-capital backed.

The enabling ecosystem includes approximately 700 investors and more than 550 innovation brokers, both public and private, powering more than 800 unique programs in support of entrepreneurship and innovation.

Beyond the number of scaleups, which is calculated analytically, all other figures represent our best-effort assessment of the different components of the ecosystem. The analysis starts from government data and consolidates available data sources. While this work is continuously refined, we believe that open-sourcing this data through the MTB Innovation Ecosystem Platform provides a further opportunity to build (innovation) bridges.

The demand side completes the picture:

• About 130 local companies with structured open innovation activities.
• Roughly 90 international companies with an identified innovation outpost in South Korea.

These figures are also subject to continuous monitoring and refinement as the ecosystem evolves and new players and activities emerge.

The point of measuring

None of this is an academic exercise. The output of this kind of methodology — as we discussed applying it to Korea this week — is meant to be actionable: It should tell a government where its ecosystem sits on the Innovation Ecosystems Life Cycle Curve, where the bottlenecks are, and how it compares to peer economies pursuing the same transition from startup nation to scaleup nation.

Get the methodology right, and the numbers stop being a scoreboard and start being a diagnosis.

A decade of divergence

This is exactly what happened in South Korea.

Just 10 years ago, Korea was about 40% smaller than Japan and Germany, comparable in size to Australia and Spain, and slightly ahead of Singapore and Italy. Fast-forward 10 years, and Korea had become the clear leader of the pack. With 3,233 scaleups in 2025, Korea:

• Started pulling away from Germany and Japan, building a positive gap that appears difficult to close;
• Grew to more than double the size of Spain — Korea’s most comparable European tech ecosystem in 2015; and
• Nearly doubled the size of Singapore, the other Far East tech haven.

Strategy, not luck

The extraordinarily rapid growth of the Korean innovation economy is not the result of chance, but rather of more than two decades of forward-looking strategic government direction.

After establishing the basic framework for a radical increase in R&D spending — from 2%-3% of GDP to a minimum of 5% in 2008 — Korea, in 2013, underscored the centrality of tech entrepreneurship as a strategic pillar of the economy, alongside the launch of TIPS, or Tech Incubator Program for Startup, to boost the early-stage segment. Subsequent policies expanded on this framework by supporting the scaling process of local tech companies. In particular, between 2014 and 2015, 17 regional centers of innovation (CCEI — Centers for Creative Economy and Innovation) were established, bringing together local large conglomerates (chaebols) and startup incubation activities.

New regulatory frameworks allowed greater freedom for experimentation by tech companies, opened the door to new forms of financing, and provided incentives for scaleup financing. More recently, starting in 2022, new dedicated strategies and instruments have contributed to a major shift, concentrating investments and tools on deep technology innovation.

The figure below highlights the impact of some flagship innovation-related policies enacted by the Korean government, juxtaposed with the historical growth of the overall scaleup ecosystem.

Get the full story in Mind The Bridge’s report, available for free download .

is chairman of and a professor at . He is a serial entrepreneur who has started three startups in his career, the last of which is , among the five Italian scaleups that have raised the largest amount of capital. He is recognized among the leading international experts in open innovation and has wide experience in setting up and managing open innovation projects —Ěýventure clients, venture builders, intrapreneurship, CVCs — with large multinational companies, as well as advising and training on this subject. Onetti has a column on () and several other tech blogs.

Photo by on .

led the round, with participation from co-leads Scaleup Europe Fund, managed by , and existing investor .

The financing comes nearly one year to the day after Mistral’s $2 billion Series C, which valued the company at $13.7 billion. Mistral has now raised $7.5 billion since its 2023 inception.

Mistral’s new raise means it retains its spot as the most highly valued foundation model company out of Europe. There are currently seven private frontier labs valued above $20 billion on The şÚÁĎłÔąĎ Unicorn board — eight including China’s , which is also building its own model — though the rest are all based in the U.S. and China.

In a statement, the company says the new capital will “significantly expand Mistral’s frontier research” and help it “expand infrastructure and accelerate” its commercial growth and international footprint. Mistral currently operates across 20 countries and counts more than 125 global enterprises as customers, including , , and .

Mistral builds AI models for tasks such as generating text, writing code and analyzing documents, putting it in competition with U.S. companies including , and .

However, unlike many of its U.S. rivals, Mistral touts greater control for businesses by offering models they can customize and run on their own systems rather than relying entirely on a third-party cloud provider.

Europe’s VC momentum

This year has marked a turning point for European venture funding. In Q2, Europe posted its strongest quarter in four years for venture funding, şÚÁĎłÔąĎ data shows. All told, Europe-based startups raised $24 billion in the quarter, up around a third quarter over quarter and two-thirds higher than the $14.4 billion raised in Q2 2025.

At the time of Mistral’s $2 billion Series C, that raise represented the largest venture round ever raised by a European AI company.

This latest round has now eclipsed that, and several other large AI-related deals in Europe have also closed this year. They include London-based Google spinoff , which raised a $2.1 billion Series B in May led by and AI data center provider , which raised a $2 billion Series C at a $14.6 billion valuation in March co-led by and . (It has also since raised several billion in debt financing, per şÚÁĎłÔąĎ.)

Related şÚÁĎłÔąĎ queries:

Related reading:

• Europe Posted Its Strongest Venture Funding Quarter In 4 Years As UK Gains, M&A Holds Up
• Mistral’s $2B Series C Is Europe’s Largest AI Round By A Lot

Illustration:

We spoke with to talk through the firm’s evolution and how it is meeting this AI moment. She is a partner at the firm who relocated to Silicon Valley from Mexico City.

When the firm was founded in 2005, Brazil didn’t yet have a startup ecosystem —Ěýthere was no network of founders, no LPs backing VC firms based there, and no follow-on investors. That has changed drastically in the couple of decades since, with the country emerging as LatAm’s startup powerhouse and a place where U.S. investors and tech giants are increasingly courting business.

Brazil is an exceptionally digitally savvy market. It is the for and the third-largest . Its real-time payment rail , created by the , was rolled out in 2020 and is used by more than 90% of adults in the country.

Latin America has also become an important market for U.S. AI labs and technology companies. Monashees recently announced a partnership with called the in which the two companies co-invest up to $2 million in AI-native and deep tech pre-seed or seed-stage startups in Brazil. Its first summit is planned for later this year in San Francisco, where it will gather Latin American startup founders building businesses with AI.

Monashees makes around eight to 10 new investments per year and is finalizing the deployment of its $370 million fund into roughly 35 companies.

The firm opened an office in Mexico City in 2022 and in September 2025 set up an office in San Francisco.

The interview has been edited for brevity and clarity.

Gené Teare: To set this up, tell me about Monashees.

Fabiola ˛ĎłÜľ±˛Ôłú˛ąĂ±´Ç˛ő: Monashees is the pioneer of venture capital in Latin America. It started 20 years ago, in 2005, with the premise that what had happened in Silicon Valley with tech could also happen in LatAm — that many of the structural problems could be solved with tech.

and , Monashees’ co-founders, were crazy enough to believe this could happen, so that’s when they started Monashees. Just to give you a little context, back in the day there was nothing. It really took time for this flywheel to get started, because if you don’t have funding, you don’t have great talent.

Finally, after five years, they managed to crack that. In 2010, you started to have the first wave of tech companies in the region, and Monashees started positioning Brazil on the global tech map.

As a second phase, the team realized that what was happening in the Brazilian ecosystem was also starting to happen in other countries in the region. Great teams were starting to build great companies. That’s when Monashees decided to expand across Latin America and back these teams. That’s when we led ’s seed round, one of the flagship companies of Latin America.

The third wave, which is what we’re focused on right now, is Global LatAm: backing Latin American founders who are building global businesses, regardless of whether they are building in Latin America or globally.

That has also been the rationale for opening an office in San Francisco. In the context of AI, you have many Latin American founders starting businesses from here because you have to be close to the labs and the talent.

We’re early-stage investors. We invest at pre-seed, seed and Series A. Seed and Series A are our sweet spot, and we are lead investors. We’re also generalists. We’re not sector-specific, we’re mostly sector-agnostic.

I see this trend when I talk to a lot of European VCs with earlier-stage investors, establishing a U.S. presence. It seems fairly recent, and it seems to be driven by this AI wave. Do you think it’s the VCs coming here and the founders following, or are the founders coming first and the VCs realizing they need more of a presence here?

˛ĎłÜľ±˛Ôłú˛ąĂ±´Ç˛ő: I think initially it was mostly founders. Now, it’s a little bit of both; they’re feeding each other.

The reason we started the office in San Francisco is that the pace at which AI evolves is unseen, even compared with other technology paradigms in the past. If you’re not here, it’s very difficult to keep pace and stay up to speed with where the AI frontier is going. You even have a gap with Wall Street, so imagine the gap with Latin America.

If you want to build an AI-native company as a Latin American founder, part of that is coming to San Francisco and Silicon Valley. San Francisco is now the magnet for all of this. It’s highly dense and concentrated. You have to be here to absorb the tools and understand what other people are doing.

I also think it’s super important because founders realize that Silicon Valley is the champions league. In Latin America, you do have great talent, but you don’t know what great looks like if you’ve never worked here.

The reason we opened an office here is to bridge that gap: to help founders be here, see what is happening at the frontier, and understand what the best companies are doing so they can replicate that back in LatAm.

The talent in the region is now sophisticated enough. It has been a 20-year process to get to a point where you have great, ambitious founders who believe they can build global businesses.

You already have success stories like from or from . Founders realize they can build globally.

In the context of AI, many of these global companies have to be based here because you have access to AI talent, but also to funding. Being close to all the Silicon Valley funds is also crucial for them.

I do think several founders are coming here to build, but that also creates some issues. One important thing to note is that many of these founders are building for the Latin American market, where your revenue is in Brazilian reais or Mexican pesos. In terms of headcount, you need to be very careful that you don’t have a U.S. cost basis when your revenue is in Brazilian reais or Mexican pesos.

These very early-stage startups also cannot compete with the big labs here that are paying a lot of money for talent. Right now in San Francisco, finding AI talent is really difficult and it’s very expensive.

I think it’s more about coming here, learning and bringing back the best practices. That’s where the real arbitrage opportunity comes from. You have amazing talent in LatAm, and you can teach them. Now, in the context of AI, you have much better ways to do that and you can operate with a smaller headcount.

That’s the rationale for founders coming here and for us being here as a bridge. We help our portfolio companies stay close to AI innovation, but we also get access to Latin American founders who are building from the U.S.

We hired a researcher for the Monashees team. Andrés [Campero] has a Ph.D. from in AI. He’s one of the disciples of , who is a very renowned researcher. The rationale for having Andrés, who is Mexican, on the team is to help us connect with the research diaspora here in San Francisco. It’s very different to talk about business than it is to talk to researchers.

This is important because most researchers from Latin America don’t stay in Latin America. They come to the U.S. and work at the different universities here. It’s important for us to be connected to where most of the innovation is happening. Andrés also helps us identify the best companies emerging in the region from a technology standpoint.

Of those, how many are coming to the U.S. at the earlier stages? What proportion do you expect to come here?

˛ĎłÜľ±˛Ôłú˛ąĂ±´Ç˛ő: Some of the companies we’re seeing start in LatAm and then expand to the U.S.

We have a portfolio company called . It’s AI-native, and it develops preventive-maintenance software. The company started in Brazil.

Its customers were global businesses, and those customers started pulling the company into the U.S. Its product was much better than what was available here. The company is now headquartered in Atlanta, so you could say it’s a U.S. company now.

Most of its revenue comes from the U.S. I think examples like that — companies born in LatAm that expand globally — will tend to be around 30% of the portfolio.

Companies we invest in from the U.S., where most of the revenue will be U.S.-based, will probably be around 20%, because we continue to be a LatAm-focused fund. But we’re also going to see more LatAm-born companies coming here.

You mentioned the focus on Latin America, and talent is obviously very difficult to find here in the U.S. right now. For the companies that are based here, do you see them setting up offices in LatAm to attract talent? Are most of them using a hybrid model, or are some completely U.S.-based?

˛ĎłÜľ±˛Ôłú˛ąĂ±´Ç˛ő: It depends on the stage they’re at. Later-stage companies — think Series C or Series D — tend to have most of their technology teams in Brazil, Argentina or elsewhere in LatAm.

Another example is . It’s headquartered in Salt Lake City, but most of its technology team is in Brazil, in a smaller city called João Pessoa.

The company is building very sophisticated AI infrastructure. It was able to do that because it was very good at hiring a senior team that could teach and transfer knowledge to the local team.

We’re seeing more of that. You start with senior people, senior researchers or senior data scientists in the U.S., while much of the junior team is in LatAm.

Now, with AI, you can have fewer junior people. But you also have talent in Latin America that is strong enough to act as the senior engineers.

What are the standout companies in the Monashees portfolio that you would highlight?

˛ĎłÜľ±˛Ôłú˛ąĂ±´Ç˛ő: I’ve shared a couple. One is Tractian, the preventive-maintenance software company. The company has been growing. It’s a success story for us because it started in Brazil, and it has proprietary technology. It combines software and hardware, and it owns the patents for its hardware.

Today, it is really conquering the U.S. market. It’s a perfect example of an AI-native company born in Brazil, where the AI lab lives in Brazil, but the company is competing at the global level.

We also have Music.AI, which is in a fun industry. If you’re an amateur musician, its platform allows you to play whatever song you want and play with the instruments in the background. You can play the drums, the flute or whatever you want while having the other instruments behind you. The company has both a B2B and a B2C business. It has more than 50 million users or downloads and is growing very fast. It won iPad App of the Year two years ago. It’s another success story. It is based in Salt Lake City, but has its technology team in Brazil.

We recently invested in a company called . It’s an accelerator, so it’s similar in some ways to what we’re doing with Google. Shiva is trying to capture this new wave of entrepreneurs who might not have pursued entrepreneurship if Shiva and AI didn’t exist. , the founder, is a second-time founder. He was one of the early co-founders of one of our portfolio companies, which later went public. You can think of Shiva as the of Latin America in the sense that it is very community-driven. It is also trying to capture these solopreneurs: companies started by just one person that can go global from day one and have revenue from day one.

I think it’s a super-interesting and very different investment. It speaks to how we’re always trying to keep pace with how the ecosystem is going to evolve, because this ecosystem is also likely to be disrupted by AI.

I can also tell you about some of the companies in the portfolio that are focused specifically on Latin America.

We have a company called . It’s an HR platform. It’s very specific to the Brazilian ecosystem because regulation requires employers to provide certain benefits to employees. Flash managed to build a technology product around that, and now the company is expanding into a full HR platform. It’s one of the flagships of Fund IX. It’s growing very fast, and it has become a flagship company in Latin America. Fintech is one of the largest and most important markets in Latin America.

Another company was actually the first investment I made at Monashees. It’s a payment-orchestration platform called . The company is at the Series B stage. We invested at seed back in the day. It gives an e-commerce company a single integration through which it can manage all of its payment methods. If you’re a multinational company — think about — and you want to enter Brazil, Colombia and Peru, you have to deal with so many payment methods. With Yuno, you have just a single integration. In the context of AI, Yuno has developed a very strong agentic platform that helps with fraud and conversion. Fraud in LatAm is a big issue, and the platform helps companies manage fraud and increase conversion across these marketplaces.

Related şÚÁĎłÔąĎ queries:

Illustration:

For this matchup, “¡Gooooooooool!” is really the only acceptable way to announce a new score. And if you can make that a good 21 seconds in one breath, all the better.

Here at şÚÁĎłÔąĎ News, meanwhile, we’ve been prepping for the final in a less vocally demanding but much more data-intense manner. Since both contenders are far more famous for soccer than accomplishments in the startup realm, we figured a small step to rectify that was in order.

To do this, we put together a snapshot of recent startup funding tallies and trends for both Spain and Argentina. As you’ll see, neither accounts for a particularly large share of global or even regional investment. Both however, have an intriguing pipeline of recently funded companies.

Argentina

We’ll start with our second World Cup-related profile of Argentina. After it won the final in 2022, we wrote a venture funding-themed story calling the country’s startup scene “small, scrappy and sometimes very successful.”

Four years later, that description still holds. Argentinian startups typically pull in a few hundred million dollars in venture funding annually. Investment is, however, lower than for Brazil and Mexico, the two most populous Latin American nations, which commonly lead in funding.

Argentina’s startup ecosystem has also delivered some big hits over the years. The most famous Argentine-founded internet company — online marketplace Ěý — commands a market cap around $94 billion on . (It’s currently headquartered in Uruguay but traces its roots to a Buenos Aires garage.)

More recently, Buenos Aires-based fintech has been making waves in the regional startup scene. It’s raised $1.1 billion in known funding to date, including a $195 million March financing.

Others that have raised good-sized rounds this year are also in the fintech space, including:

• , a payments infrastructure startup, closed on a $55 million Series C round co-led by and .
• , a provider of payments and collections infrastructure, secured $27 million in Series B funding in February.

So far, 2026 is shaping up as a strong year for funding, with investment already ahead of last year’s total. Funding tends to fluctuate quite a bit from year to year as the presence or absence of a single large round or two can heavily skew the totals.

Spain

Oddsmakers say Spain is the favorite going into the final. However, it’s well known that often the underdog also prevails. That was the lesson from Spain’s 2:0 defeat of favorite France this week.

But while it may have prevailed over France in soccer, Spain continues to lag in venture funding. So far in 2026, Spanish startups have raised less than $2 billion in funding across stages, which is roughly one-third France’s total for the same period.

While not large, Spain’s funded startup pipeline is not lacking in pizazz. Take this year’s largest funding recipient — — which closed a $206 million Series C in March. Its anything-but-modest mission is to be a “global space transportation service provider to support cargo and human spaceflight missions to the Moon and Mars.”

Other standouts among the bigger rounds this year include:

• , an AI-enabled HR and payroll platform, scooped up $150 million in Series D funding at a $2.5 billion valuation in June. To date, the Barcelona-based company has raised over $350 million in equity funding.
• Ěý, a Madrid startup focused on infrastructure for near space, space tourism and aerospace data, closed on $140 million in Series D funding in May.
• , a Madrid-based developer of AI tools for analyzing geospatial data, picked up $130 million in Series B funding in April.

Overall funding to Spanish startups is also trending higher, with 2026 on track for a year-over-year gain. For the past few years, annual Spanish startup funding has ranged between $1.8 billion and $2.8 billion, as charted below.

Rooting for the underdog

While both Spain and Argentina have a long track record of soccer success, a case could be made that both are underdogs in the startup space. It’s a familiar situation for secondary hubs in the current AI-driven investment cycle. Capital has been concentrating even more heavily in Silicon Valley and other leading venture hubs.

Given all the follow-on effects a successful startup can have on its region, it’d be encouraging to see investors spreading their bets more broadly across a wider geography. Spain and Argentina have already proven they have what it takes to prevail in one very competitive arena. Given the capital and opportunity, there’s no reason to doubt their abilities in the venture-backed startup game either.

Related şÚÁĎłÔąĎ queries:

Overall, investors poured $42.8 billion into startup funding rounds across all of Asia in Q2 2026, per şÚÁĎłÔąĎ data. That’s by far the highest quarterly total in more than three years, as charted below.

Investment rose sharply at both seed and early stage, driven by megarounds for foundational AI startups. Capital was highly concentrated among a few favored names, with deal counts actually hitting a multiyear low in Q2, even as investment skyrocketed.

Table of contents

• AI leads the surge
• China leads, followed by India and Singapore
• Late stage gets a boost
• Early stage was on fire too
• Seed holds strong
• An up quarter
• Methodology
• Glossary of funding terms

AI leads the surge

Artificial intelligence-focused startups scooped up more than 60% of all venture funding to Asia-based startups in Q2. Altogether, those companies pulled in just over $26 billion, by far the highest sum on record.

A handful of companies accounted for a big chunk of the total. Of those, China-based large language model developer was the fundraising leader by a wide margin, raising $7.4 billion at a reported $50 billion valuation in June.

Two other companies tied for second, each raising $2.5 billion. One, foundational AI startup , is based in China. The other, AI data center developer , is headquartered in Singapore.

China leads, followed by India and Singapore

Alongside the AI surge, the other standout investment trend for Q2 was the sharp rise in funding to China-based startups.

Overall, Chinese companies pulled in just over $30 billion in venture funding across stages during the quarter. Investment was up a staggering 424% over year-ago levels and rose 76% from the prior quarter.

The next-largest funding destinations were Singapore, which attracted about

$3.6 billion, and India, with $3.3 billion. Below, we charted the funding share among the six Asian countries with the highest levels of startup investment in Q2.

Late stage gets a boost

The Q2 funding gains weren’t limited to a particular stage, as both early- and later-stage dealmaking saw increased investment.

Late stage pulled in the largest share. Per şÚÁĎłÔąĎ data, nearly $21 billion went to late-stage and technology growth rounds for startups in Asia in the just-ended quarter, the highest total in more than four years.

Funding was more than triple year-ago levels. Gains have steadily mounted over the past five quarters, as charted below.

Early stage was on fire too

Early stage investment also soared, hitting its highest point since 2021.

Overall, an estimated $18.4 billion went to early-stage rounds in Q2, roughly triple year-ago levels and up 57% from the prior quarter.

Seed holds strong

Seed, meanwhile, also held strong, with $3.7 billion in reported investment at this stage in Q2, roughly flat with the prior quarter. (As always, we expect the final number for Q2 to come in higher, as deals may be entered into the dataset weeks or months after the close.)

An up quarter

Broadly, the second quarter tallies paint an upbeat picture for Asia’s startup funding scene, at least compared to a year or two ago. That said, investors continue to be quite selective about who they fund, meaning that while chosen founders are attracting big checks, others may still be struggling to secure backing, even at much smaller sums.

Related şÚÁĎłÔąĎ query:

Methodology

The data contained in this report comes directly from şÚÁĎłÔąĎ, and is based on reported data. Data is as of July 10, 2026.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

Please note that all funding values are given in U.S. dollars unless otherwise noted.

şÚÁĎłÔąĎ converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to şÚÁĎłÔąĎ long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of funding terms

Seed and angel consists of seed, pre-seed and angel rounds. şÚÁĎłÔąĎ also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. şÚÁĎłÔąĎ includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round.

Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)

Illustration:

Within the region, U.K. startups gained significant share in Q2, raising more than $10 billion. That marked the third-largest funding quarter for the U.K. on record, and came in at less than $500 million below its peak quarter in 2021.

European startup M&A activity also picked up in Q1 and continued that momentum in Q2, even as public-market exits stayed subdued.

Table of contents

• Large rounds drive gains
• H1 2026 up 50%
• UK momentum builds
• By stage
• Looking ahead
• Methodology
• Glossary of funding terms

Large rounds drive gains

Four companies raised venture fundings of a billion dollars or more last quarter, accounting for 25% of all startup investment in the region in Q2, şÚÁĎłÔąĎ data shows.

Those billion-dollar-plus rounds were raised by an AI-centric group: -owned AI drug developer , which was spun out of ; green steel production manufacturer ; , which is developing robots for home and industrial applications; and , an AI lab founded by former DeepMind researchers.

However, most of the growth in funding year over year and quarter over quarter was driven by rounds of $100 million and over. The majority of funding — 65% —Ěýwent to a group of 42 companies that raised rounds of $100 million-plus. Sectors that stood out for these companies includeĚý biotech, quantum, financial services, AI labs, aerospace, semiconductor, robotics and energy.

H1 2026 up 50%

Funding to Europe-based startups in H1 was up 50% year over year to total $42 billion, şÚÁĎłÔąĎ data shows. Still, the region’s startup investment for the first half of the year remained well below the 2021 H1 peak, when VC funding in Europe totaled $60 billion.

It’s also drastically lower than the $392 billion raised in North America’s record-setting H1, with that region’s funding up 158% year over year.

Europe’s funding deal count subsided last quarter, but mostly at the seed stage. Late-stage rounds were up a bit, while early-stage deals dipped slightly year over year. (It’s worth noting, seed stage rounds are often added to the şÚÁĎłÔąĎ data set after the close of the quarter, so those numbers will increase over time.)

UK momentum builds

The United Kingdom widened its venture-funding lead last quarter, as startups based in the country raised $10.4 billion — not far from the peak in 2021 at $10.8 billion.

The region’s No. 2 startup market, Germany, trailed with $3.2 billion raised by its startups in Q2, and France followed in third place with $2.4 billion. Sweden was Europe’s fourth-largest startup market last quarter, with its companies raising $2 billion.

şÚÁĎłÔąĎ data shows funding to Europe’s AI-focused companies reached more than $10 billion in Q2 — the largest quarterly amount so far — but slightly below the Q1 percentage, when those companies raised more than half of the region’s startup investment.

By stage

Europe’s late-stage funding totaled $12.1 billion in Q2, up 90% year over year. Large Series C and D rounds were raised by Germany-based robotics developer Neura Robotics; Netherlands-based , which makes inspection tools for semiconductor manufacturing; U.K.-based quantum computing startup ; and Germany-based satellite launcher .

Early-stage funding reached $8.6 billion across 250-plus Europe-based startups last quarter, şÚÁĎłÔąĎ data shows. Large Series A and Series B rounds were raised by London-based Isomorphic Labs, London-based AI self-learning lab , Germany-based fusion energy company , London-based semiconductor developer , and London-based quantum processor provider .

European seed funding totaled $3.2 billion last quarter, with a billion dollars of that raised by just one company: Ineffable Intelligence.

Other large seed rounds were raised by , a London-based AI lab for science; Italy-based autonomous driving technology producer ; and Stockholm-based defense tech company .

M&A increase

While IPO activity for European startups was muted, M&A showed strong momentum following increased activity in Q1. A total of 154 Europe-based, venture-backed companies were acquired for a cumulative $11.5 billion or more in Q2, şÚÁĎłÔąĎ data shows. That includes three companies acquired for more than $1 billion each in biotech, industrial AI and micromobility.

Looking ahead

European startup investment has now steadily increased since the fourth quarter of 2024, with increased momentum in the just-ended quarter, driven by larger rounds of $100 million and over. The region’s startup ecosystem shows particular strength in deep tech and financial services as well as the formation of new AI labs, and M&A activity has fueled liquidity for the next batch of startups.

Now the question remains: Will it be enough to keep Europe competitive with the frontrunners, the U.S. and China?

Related şÚÁĎłÔąĎ queries:

Related reading:

• şÚÁĎłÔąĎ Data: Global Startup Investment Hit Record $510B In H1 2026 As AI Boom Accelerates Funding And Exits
• North American Startup Funding Shattered Records In First Half Of 2026, Driven By AI

Methodology

The data contained in this report comes directly from şÚÁĎłÔąĎ, and is based on reported data. Data is as of July 6, 2026.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

Please note that all funding values are given in U.S. dollars unless otherwise noted. şÚÁĎłÔąĎ converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to şÚÁĎłÔąĎ long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of funding terms

Seed and angel consists of seed, pre-seed and angel rounds. şÚÁĎłÔąĎ also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. şÚÁĎłÔąĎ includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round.

Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)

Since its launch almost two decades ago in 2007, the firm — which had an initial fund of just $3 million —Ěý has invested in around 550 companies. With this latest fund, its assets under management have reached $1 billion.Ěý

şÚÁĎłÔąĎ News spoke with , the firm’s managing partner who joined Seedcamp in 2010 and , who rejoined the firm in 2022 to head up the select fund and establish a New York presence.Ěý

Seedcamp invested early in , , , and .

Since fund 2, it has invested in 100 companies per fund. “What we’ve learned is that you need a community to support each other,” said Espinal. The tipping point for the firm was 70 companies where it became clear that founders were helping one another, becoming customers, and teams starting new companies.

“We realized early on that the best thing a founder can get is access to another founder who just went through that experience — not necessarily a founder who is successful 10 years down the road and is a great figurehead, but someone just a little bit ahead. That’s effectively our secret sauce,” said Espinal.Ěý

Seedcamp also invests in software and vertical AI, but is careful about what is compelling and unique. “We’re trying to monitor so we’re not one of eight bets in one area that’s been overinvested within the AI vertical space, and making sure that you’re not betting on number 100 in a space that’s hypercompetitive,” Espinal said.Ěý

Seedcamp plans to invest in 35 new companies per year, totaling 100 to 120 for the new fund. It invests up to $1.3 million in its initial check, and will lead roughly 70% of those deals with a 5% to 10% ownership target.Ěý

The firm reserves 40% for follow-on seed and Series A rounds. Its select fund will invest in portfolio companies from Series B onward.

“Building is so much easier and faster now,” Howe said. “Signals of product-market fit are there earlier. The founder DNA is still the same, but the ability to see it in action earlier is there with the AI lift.”

New York presence

Howe, who heads up the New York office, noted that European companies are heading to the U.S. earlier. “Historically, maybe we’d see a company raise a round and stay in Europe, dominate their local market, raise a few more rounds, and then come to the U.S.” she said. “Now we’re seeing them come right from the get-go.”

From fund 3, its 2014 vintage fund, the firm’s return is 13x distributions to paid-in capital, with Revolut, UiPath and seed investments from that fund.

Related şÚÁĎłÔąĎ queries:

• Ěý

Illustration:

So far in 2026, U.S. companies have pulled in nearly 80% of global seed- through growth-stage financing, per şÚÁĎłÔąĎ data. That’s a sharp divergence from the years leading up to the AI boom, when American companies typically secured less than half of all investment.

Gap for AI is even more pronounced

The U.S. share of artificial intelligence-related investment is even greater.

So far this year, nearly 88% of AI-related startup funding, or $319 billion, went to U.S.-headquartered companies, per şÚÁĎłÔąĎ data. Of that, most went to just two recipients, and .

Since both Anthropic and OpenAI are on track for public market debuts later this year, it’s possible next year’s comps will be less lopsided, as they won’t be raising any more giant late-stage financings. We’ll see.

Large venture hubs outperform small and mid-sized ones

Although no other country comes close to the U.S. for startup funding, a few of the larger technology investment hubs are seeing year-over-year gains.

Funding to China’s startups, in particular, is on the rise after several sluggish years. So far in 2026, startups have raised over $33 billion, per şÚÁĎłÔąĎ data, already surpassing the total for all of 2025.

The United Kingdom is also looking up. U.K.-based startups have pulled in $16.5 billion so far this year, compared to $19.5 billion in all of 2025. AI and fintech are the country’s leading sectors for investment.

Other mid-sized venture markets are seeing funding levels this year that are on track to be flat or moderately higher year over year, per şÚÁĎłÔąĎ data. In Europe, this includes France, Spain and Germany.

In Asia, India, Japan and South Korea are also neither way up nor way down. Canada and Australia, meanwhile, aren’t in a slump but also aren’t seeing any major AI-focused funding raised this year.

Maybe it’s a US bubble?

Now that more than three-fourths of startup funding is going to U.S. companies, it seems timely to note that the country is home to only a little over 4% of the global population.

On the tech startup front, it’s undoubtedly an impressive 4%. The U.S. has an unrivaled track record for building leading technology companies, along with the capital and talent to keep on doing so.

That said, certain trends do warrant some serious bubble consideration. The anomalously high concentration of startup funding into American companies is one of them.

Surely many of the countries in which the remaining 96% of people on Earth dwell possess entrepreneurial talent, infrastructure and economic might that could support more than just a measly 12% share of AI startup funding. If one was a betting type, it’s hard not to argue that the odds for that look pretty good.

Related şÚÁĎłÔąĎ queries:

Related reading:

• Q1 2026 Shatters Venture Funding Records As AI Boom Pushes Startup Investment To $300B

Illustration:

So far this year, investors have put about $7.8 billion into Boston-area startups, per şÚÁĎłÔąĎ That puts the region on track for a moderate annual gain and the strongest tally in about four years, as charted below.

Invidious comparison

Under normal circumstances, such numbers might be celebrated as pretty strong. But many Bostonians don’t see it that way.

“For the first time, startups in Texas raised more VC money than those in Massachusetts,” one headline this spring. Earlier this year, another correspondent concerns from local startup backers and builders that the tech startup scene is thinning out.

At root, the issue may not be that Bostonians are delivering so little investable startup talent, but rather that other places are swimming in unprecedented capital. This kind of invidious comparison is particularly stark in the AI realm.

Overall, North America venture funding hit a record high in the first quarter of this year, surging to $252 billion. Of that, more than 87% went to companies in şÚÁĎłÔąĎ AI-related categories.

Few of those AI mega-fundraisers were in Massachusetts. The biggest, most heavily funded names in generative AI, like , and others, are predominantly headquartered in the San Francisco Bay Area. That means Boston didn’t get a slice of history’s largest startup funding rounds.

By contrast, biotech, a traditional area of strength for the Boston area, hasn’t been on a funding tear. True, there’s no dramatic slump. But in a time when a single venture-backed AI company can snag $122 billion in a , biotech round sizes can’t compete for scale.

Standout rounds

Still, by pre-AI standards of venture funding, Boston has been scaling some heavy hitters.

Per şÚÁĎłÔąĎ , at least 12 companies in the greater metro areaĚý1 raised rounds of $200 million or more this year, listed below.

The largest round went to , a provider of wearable fitness technology and a subscription platform that raised $575 million in Series G funding at a $10.1 billion valuation in March. The company says it is powered by more than 24 billion hours of physiological data and purpose-built AI models to provide predictive, personalized health insights.

, a provider of consumer privacy and security tools, came in second. It secured $375 million in Series B funding in March led by and .

Next on the list is , which provides healthcare plans to seniors on Medicare. The 9-year-old company disclosed in January that it had closed on $366 million across two Series F funding tranches.

Biotech startups, meanwhile, didn’t make the top 3 but were heavily represented on the list. Overall, more than half of funded startups in the list are focused on biotech or healthcare.

Why compare?

Boston isn’t the San Francisco Bay Area, and it certainly isn’t Texas. So it’s worth asking: What is the point of comparing startup ecosystems? Is a metro area flailing if it doesn’t keep up with a particular major innovation cycle, even if it maintains core areas of strength?

At risk of over-generalizing, we’d conclude that competitive rank still matters. A metro area can retain its crown as a startup innovation hub only if it continues to produce transformative companies.

For Boston, there’s no indication the region is losing its edge in biotech and other sectors where it’s long been an established powerhouse. However, in the generative AI era, it’s also evident that the region has not produced one of the most high-valuation players in the space, and that’s put some ding in the city’s reputation as a leading innovation hub.

Related şÚÁĎłÔąĎ queries:

Related reading:

• North America Q1 Funding Surges Across Stages To Record Level
• Whoop’s Wearable Fitness Tech Lands $575M From Athletes, Celebrities, Institutional Investors To Reach $10.1B Valuation

The global innovation economy remains largely defined by agglomeration dynamics. Worldwide, 19 ecosystems dominate the innovation landscape, increasingly concentrating innovation demand (corporates) and supply (scaleups) — attracting further growth capital (investors).

Meanwhile, other ecosystems struggle to achieve a meaningful presence on the global innovation map and are at serious risk of technological disruption and economic downfall.

Yet something is happening below the surface. Over the past decade, the composition of the Global Innovation Ecosystems Life Cycle Curve changed dramatically, as the number of scaleup ecosystems worldwide has more than doubled.

The trend is not stopping just here: we expect these figures to even triple in the coming years.

In this new scenario, emerging innovation economies hold the potential for disrupting the agglomeration paradigm, toward a new scheme of interconnected networks of specialized local innovation hot spots.

Among them, there is also Africa. While the continent still lacks ecosystems at the most advanced stages of maturity, it now counts four ecosystems at the startup stage and 40 at the standup stage, compared with respectively 25 of those 10 years ago, according to by my organization, , in collaboration with and .

Africa: the awakening giant of the coming decade?

As of today, Africa’s innovation economy includes 883 tech scaleups that have raised a combined $24.7 billion. Despite this progress, the continent still represents only about 1% of global figures.

The African innovation landscape remains highly concentrated around four main hubs: South Africa, Egypt (North-East), Nigeria (West Africa) and Kenya (East Africa). The North-Western corner of the continent still lacks a dominant hub, although Tunisia, Morocco and Algeria remain the leading candidates.

A testbed for clean technologies?

Emerging innovation economies that thrive on the global innovation map typically build on top of highly specialized, unique local strengths.

Our recent analysis has identified clear evidence that Africa holds significant potential over the development of clean energy systems and technologies.

The relative prominence of the cleantech sector in Africa is evident from the data:

• Africa is home to 95 cleantech scaleups, representing roughly 11% of the total scaleup base.
• Collectively, they have attracted approximately one-fifth of all capital deployed to African ventures.
• Cleantech has also generated a disproportionate share of high-growth leaders, accounting for around 20% of both scalers (scaleups that raised more than $100 million) and super scalers ($1 billion-plus).

Within cleantech, a highly specialized vertical is also emerging, what we might call “gridtech”:

• It comprises 16 scaleups (17% of the cleantech total) and two scalers (25% of total).
• It has attracted around 30% of total cleantech funding.
• Africa’s sole cleantech tech giant, Kenya-based , operates within this gridtech vertical.

That said, the numbers still point to a gap.

The elephant in the room

The main challenge is the grid infrastructure deficit, which remains the primary bottleneck to scaling energy system technologies. As shown in the map below, Africa’s grid infrastructure is highly fragmented: High-voltage networks are concentrated in a few densely populated areas, while large parts of the continent remain largely disconnected.

As a result, grid infrastructure development and electrification are key to unlocking Africa’s growth — consider that Africa still accounts for only about 5% of global energy supply — and its innovation potential.

At the same time, the continent holds world-class renewable resources, including approximately 13% of global technical hydropower potential and around 60% of the world’s best solar resources.

Africa’s energy system is expanding, but fully unlocking its economic and innovation potential will depend on accelerating electrification and strengthening grid infrastructure.

Blended finance will be critical to enable this growth. Both private and public capital are required: private capital drives innovation, while public finance enables foundational infrastructure such as grid expansion.

In particular, private capital needs to be complemented by structured public finance initiatives to address the inherent limitations of a relatively small domestic VC market, which remains heavily focused on early-stage investments.

Public capital will be essential for infrastructure development. In gridtech especially, public investors are expected to account for up to about 80% of total investments by 2030, reflecting the capital intensity and risk profile of grid infrastructure.

International capital still dominates the market, with approximately 69% of active investors originating outside Africa, underscoring continued reliance on foreign capital despite growing local participation.

Get the full story in our report:

is chairman of and a professor at . He is a serial entrepreneur who has started three startups in his career, the last of which is , among the five Italian scaleups that have raised the largest amount of capital. He is recognized among the leading international experts in open innovation and has wide experience in setting up and managing open innovation projects — venture clients, venture builders, intrapreneurship, CVCs — with large multinational companies, as well as advising and training on this subject. Onetti has a column on () and several other tech blogs.

Photo by on .