Supporting the EU Apply AI Strategy: AI startup and investment activity across 10 key industrial verticals

Nov 13, 2025 - 13:00

A new report by the EU-funded Innovation Radar bridge project has just been published, and it explores investment and startup activity in 10 industrial verticals of the EU’s Apply AI strategy, announced in October 2025.

Europe is staking its claim in the global AI race, with startups at the forefront of this transformation. The second data-driven report from the Innovation Radar Bridge project pinpoints ten industrial verticals where European innovation is thriving, where investment is flowing fastest, and which verticals remain underfunded.

The new report is set against the backdrop of the ‘Apply AI Strategy’ which aims to accelerate AI adoption across Europe’s strategic verticals and in the public sector. The strategy recognises the need to support SMEs, foster innovation, and reduce reliance on foreign technologies.

As signalled in this report, Europe currently accounts for around 5% of global AI computing capacity, prompting significant investments in the EU’s AI Factories and a €20 billion commitment by the European Commission in AI gigafactories. At the same time, Europe has a credible opportunity to lead with open-source AI solutions, and with industry specific AI applications, offering a differentiated path compared with US closed models. It is in this context that the EU Apply AI Strategy outlines flagship actions to advance AI adoption across 10 industrial verticals and by the public sector (see separate EU report on use of AI by the Public Sector) .

Key takeaways from the report:

The report delivers significant insights as to the current status across these 10 industrial verticals.

4,100+ Apply AI startups in the EU (approximately 6% of all VC-backed startups)
Combined enterprise value (EV): €161 billion in 2025, a 16-times increase over ten years
Total VC raised since 2020: €20 billion (17% of all EU VC, nearly half of EU AI VC)
250+ new Apply AI startups raise their first VC round each year

Industrial verticals that are booming:

Leading by both enterprise value (EV) and venture capital (VC) funding are Health & Pharma (€43 billion EV, €4.7 billion VC since 2020) and Defence, Security & Space (€38 billion EV, €4.6 billion VC). They also account for 18 Unicorns and Thoroughbreds.
They are followed by Cultural & Creative Industries (€29 billion EV) and Robotics (€2.4 billion VC).
Environment & Climate (€6 billion EV, €0.7 billion VC), Energy (€7 billion EV, €1.6 billion VC), and Agri-food (€5 billion EV, €1.1 billion VC) are relatively smaller. Nevertheless, they stand out globally as areas where Europe captures a higher share of global AI VC.
The verticals that show the fastest EV growth since 2015 are Environment & Climate (1,725% growth), Mobility, Transport & Automotive (64% growth), and Security & Defence (62% growth)

This report shows that Europe’s third way for AI involves responsible regulation, provision of AI compute as a ‘public good’, embracing open-source, and leveraging its global industrial leaders.

This timely new report provides startups, investors and policymakers with vital data-driven intelligence about where AI innovation is thriving in Europe, where gaps remain, and how the EU can strengthen the competitiveness of its AI ecosystem.

Download the full report here to explore data-driven insights shaping Europe’s AI future.

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