European tech investments: December signals that defined 2025

Every month, Zubr Capital presents a concise brief on how the European tech investment landscape is shifting. Each brief covers more than just deals, focusing on capital flows and looking more closely at how the market is evolving and where it may be headed next.

December of 2025 finished off the year by crystallising the trends we’ve been monitoring since summer. What we defined as a period of “practicality” in the autumn months has matured through December. The tech market has now learned to better handle massive early-stage checks, extract innovation from research, and filter out business models that cannot pass the “reality” test.

In this brief edition, we highlight the tactical shifts of December and offer a clear summary of the trends that reshaped the European venture landscape throughout 2025.

The signals closing out the year
Foodtech enters the selection phase

In previous editions of our publications, we noted how AgriFoodTech was changing, but December marked a clear shift in the narrative. What was a phase of broad experimentation has grown into an incredibly rigorous model selection.

Meatable, the Netherlands pioneer, is a good example. It closed operations after failing to secure new funding. While this was happening, peers like Mosa Meat (€15 million) and Those Vegan Cowboys (€6.25 million) continued to attract new and diverse capital.

It’s important to see this shift because it marks a transition from the idea of “investing in everything green” toward early niche consolidation and filtration. Instead of everyone being focused on the technology’s promise, it is the maturity of the build model and capital efficiency that are driving progress. The first viable filter of 2025 emerged as the market began to concentrate resources around a smaller set of leaders while others exited the landscape.

AI moves into execution

AI is everywhere, and we noted how autumn marked the infrastructure layer of growth. In December, AI moved into an execution phase. Notably, PolyAI (€73 million), Equixly (€10 million), and Mirelo AI (€35 million) all supported the emergence of a new “Agentic AI” sublayer.

Investors are seeing the real-time functional shift in how AI is developing. It is moving from advisory support to the practical delegation of action. AI systems used to only suggest improvements, but now we are seeing independent task execution, such as complex voice interactions with PolyAI or autonomy conducting security audits through Equixly.

There was a significant rise in “Physical AI” robotics through November, but December showed how a software-based autonomous AI layer is now taking shape. Investors are seeking agents capable of executing end-to-end operation workflows over smarter assistants.

Deeptech enters a systemic pipeline

There were many individual deeptech breakthroughs throughout the previous months. In December, a structural shift in the industry occurred with the emergence of specialised “pipelines” created to bridge the gap between European research or testing and the open market.

You can see this shift with the launch of several dedicated vehicles, such as the U2V fund (an Earlybird-X spin-off), 55 North Deeptech, and the ETH Foundation’s targeted support for Soverli.

DeepTech is finally moving away from the “handcrafted deal” phase and into an institutional flow. It’s no longer about isolated success stories in research or academic tests, but the formal transference of innovative tech to industry deployment. December 2025 marked the early formation of reproducible and scalable European DeepTech development set to hit the market.

Non-dilutive finance debuts at scale

We’ve mentioned many times how the growing role of debt and credit lines in infrastructure is scaling up financing. What changed in December was the €15.2 million revenue share deal secured by Reface.

This one example of non-dilutive growth financing at this level marks a new era across European markets. Unlike traditional equity rounds or standard debt terms, the Ukraine-founded company proved a model of capital in exchange for a percentage of revenue. That creates an alternative pathway to scale without sacrificing or diluting founder ownership. Even though Reface is a high-profile case, it illustrates how the financial toolkit is diversifying, especially for mature European firms.

Seeing the macro-view: from monthly shifts to annual transformation

December demonstrated how these tactical industry signals were not isolated events. They are the final data points in a much broader shift. To better understand how the current state of the market is changing, it helps to look more closely at the five fundamental trends that impacted venture markets in 2025.

The acceptance of financial engineering

During 2025, European startup financing evolved from a series of equity rounds into something more unique. We saw how isolated, unconventional funding experiences soon became a capital stack now widely used, especially for infrastructure and hardware-heavy models. The shift wasn’t due to high interest rates. It was a deliberate move to offer better funding opportunities at a physical scale through debt, facilities, and non-dilutive instruments without compromising equity.

The idea behind this new financial architecture mirrors a more permanent shift in market logic. With a lower tolerance for dilution, demand for capital efficiency rises. The result is that founders and teams need more financial competence, equalling what used to be a focus on product execution. Skill development is changing.

You can see this transformation throughout December’s deals, including massive infrastructure facilities like Elvy (€500 million) and Mondu (€100 million), as well as flexible growth tools such as Reface (€15.2 million revenue share) and Picus Capital’s preferred equity (€150 million).

The growth of industrial tech

2025 was a growth year for tech, marked by a shift from software narratives to industrial applications. In many sectors, success is now measured by a company’s physical capacity and infrastructure more than by ambition alone. That shift is best represented by tech moving into the realm of CapEx. The idea of “sovereignty” was transformed, with true independence requiring the ability to produce.

Investors pivoted from standalone R&D stories to more “industrial notes” where technology is reproducible. It didn’t matter if the tech involved AI, energy, or defence. The market now prefers physical infrastructure that can scale.

QuantumDiamonds is a good example of this preference. In December, they announced a €152 million plan to build additional semiconductor inspection capacity rather than focus solely on software development. In addition to a wave of industrial loans and facilities, the signal is clear. Europe is scaling mechanisms and infrastructure alongside new ideas. You can expect hard infrastructure to be the foundation for the next tech cycle.

Defence and sovereign tech becomes a capital market

Defence and sovereign tech were once considered “special cases” by investors. December 2025 marked them fusing into a distinctive capital market. Instead of cautious, reactive funding, the specialty sector enjoyed systematic investment logic with dual-use tech as the baseline. The defence sector is no longer marginal but a coherent capital circuit integrating venture funding, structured debt, and long-term industrial planning.

LP logic was a critical driver of this sector. Capital now flows through vehicles designed for the long-term goals of defence projects instead of general funding pools. Confirmation of this shift happened with the €150 million first close of the Keen Defence Tech Fund.

The sector can be managed independently, supported by a growing core network of specialised deals like NanoXplore and AIDOPTATION, by the strategic interplay between Quantum Systems and FERNRIDE, and by a large-scale facility for Destinus. What once could be considered a sensitive geopolitical topic in sovereign tech has become an organised, investible market.

Consolidation becomes system maintenance

M&A has made a massive transformation from the “final chapter” of a startup’s story to being a critical mechanism for market stability. We noted that earlier in the year, consolidation often served more as a “reactive” survival tactic. By the second half of the year, it quickly evolved into a proactive tool. Companies are moving to acquisitions to reboot category leaders rather than use simple exits for liquidity.

The service layer of M&A focuses on long-term viability through both majority stake takeovers and “strategic glue” deals. December offers clear examples of recalibration. ReBirth’s majority stake in Cowboy demonstrates how to stabilise a market leader. Monzo’s acquisition of Habito and ABB’s takeover of IPEC also highlight how absorbing specific engineering capabilities can stabilise a company. We even saw small, but more synergistic moves, such as Omnidocs joining a Danish entity. The sector is maturing, prioritising durability.

Polarisation as a structural market force

In December 2025, the gap between the top and bottom of the venture market widened. The “barbell” framework that once seemed temporary has now become a stable structure. The centre of this barbell, being standard Series A/B, has lost its role as the market anchor. High velocity on the top tier and dense micro-seed experimentation is offsetting that centre. The diversity of this polarisation was shown in massive debt facilities and financial engineering, allowing some category leaders to pull ahead while early-stage activity remained vibrant, but fragmented.

December’s deals captured this polarisation. You can see top, industrial-scale examples with Kraken (€850 million), Lovable (€281 million), and Elvy (€500 million facility). At the micro-round level, there was Ramensoft (€400k), and Future Greens (€569k). Even with a loss of uniformity, the European market has become more structured, divided between capital-intensive champions and lean, hyper-focused vehicles.

Closing out the 2025 market form

All the signals we observed in December 2025 only cemented the trends noted throughout the rest of the year. In many ways, the final month completed them. All the gradual shifts become much more explicit. Filters hardened, structure formalised, and capital stopped tolerating ambiguity. December wasn’t a measurement of market change because it removed any remaining illusions about where everything currently stands.

The European venture market has finally transitioned from one of exploration to execution. Innovation is still important, but only when it is paired with industrial logic, financial discipline, and structural scalability. Capital no longer seeks engaging narratives. It wants clearly defined systems that allocate resources and reward operational majority.

As 2025 closes, the European tech market enters the new year not in recovery, but in equilibrium. Founders and investors must stop asking what could work and focus on what can survive and how it will scale within the new system.