U.S. investors dominate Europe’s private-led space scale-up rounds
A rendering of imaging satellites operated by Finland’s Iceye, which announced a 150 million euro Series E funding round in December led by U.S.-based General Catalyst. Credit: Iceye TAMPA, Fla. — While European space startups are attracting more venture capital, their private-led growth rounds remain anchored by U.S. investors rather than regional investment firms. The amount of venture capital invested in European space ventures in 2025 jumped 13% year-over-year to 1.2 billion euros ($1.4 billion), according to the European Space Policy Institute’s latest Space Venture report. Five of the nine scale-up rounds the think tank tracked in 2025 were led by European public entities, such as the European Union’s investment arm or the British government. However, the four remaining deals anchored by private investors were all led by U.S. firms, underlining a gap in Europe’s ability to finance late-stage space companies without relying on public institutions or foreign capital. João Serra, ESPI’s lead of industry and finance, stated that there was not a single European private investor able to lead the funding round for a European scale-up. The United Kingdom, France, and Germany remain Europe’s top three countries for cumulative space venture investment since 2014, though ESPI noted most of the top 15 have raised the majority of their funding in the last three years. Even with heavy public support, ESPI found that only 69% of the roughly two billion euros in venture funding raised by European space firms over 2024 and 2025 came from rounds led by European investors. In the United States, that figure was above 90%. Serra highlighted this gap as a broader deep tech issue in Europe, pushing companies to seek foreign investment due to necessity rather than preference. Lead investors shape more than funding totals, including board representation and voting rights, which are critical as Europe seeks greater sovereignty in space. Serra acknowledged the benefits of foreign investment but emphasized growing concerns about geopolitical risks tied to defense and strategic capabilities. Regional differences in investor participation were also noted: in France, 89% of investor participation came from Europe, with 75% from within the country, while in Germany, 45% was national, 37% came from elsewhere in Europe, and 15% from the United States. The five European space ventures attracting the most funding in 2025 included several from a smaller industrial space ecosystem. International acquirers pose a greater foreign-control concern for Europe’s space sector, with around a third of acquisitions from 2014 to 2025 involving foreign acquirers, predominantly from the United States. German ventures were particularly exposed, with foreign acquirers from the U.S., Singapore, and Saudi Arabia snapping up half of those sold during the period. The findings come amid debates over the EU Space Act, a proposed framework to harmonize rules across the bloc, raising industry concerns over added compliance costs and certification complexity. Global space venture funding hit a record 11.7 billion euros in 2025, driven by U.S. companies, while European and global investment fell compared to 2024. Including funding sources beyond venture capital, such as debt and acquisitions, ESPI said European space ventures attracted 1.4 billion euros overall in 2025, an 8% year-on-year decrease. Venture capital represented 8.3 billion euros of the global total, with IPOs and acquisitions accounting for 1.2 billion euros and 1.4 billion euros, respectively.
Source: SpaceNews