The 26 startups to watch in 2026 — plus cities, sectors and investors on the up

Hello. As usual, it's me, your host, Amy Lewin. And today we are going to be talking about what a busy start to the year it's been for Europe's tech ecosystem. We've already had five new unicorns, 5.2 billion euros raised, a 1 billion euro acquisition. And Sifted's landed several scoops revealing that several of the continent's most interesting investors, the likes of Plural and Quantum Light, are raising big new funds. So who better to discuss the bumper start to the year with than my colleague on Sifted's intelligence team, Eina Kelly, who spends his day sussing out which companies are fast on the rise, which investors are getting in on the buzziest deals and which ecosystems and sectors are hotting up. Eina, welcome back to the show. It's been a while.

0:02

Thank you, Amy. That was a very kind description of my tasks. That's if it. Thank you.

0:49

Aina's joining us from Paris. I am recording in London, so we've got a bit of European representation here already. So in terms of highlights, to give listeners a little bit more of what I was talking about in The Intro, London AI startup Faculty AI was acquired by the consultancy giant Accenture at a 1 billion euro plus valuation. Getting things off to a good start on the M and a front, Sifted got wind that AMI Labs, the startup from Yann LeCun, the former AI guru at Meta, is looking to close a more than 500 million euro round with backing from Nvidia. And this is a company that literally no one had heard of more than six or so months ago. So very buzzy, very exciting, very early. And the Sifted journalists also found out that Plural, the London based VC started by a handful of former founders and operators, including Wise co founder Tavert Himricus, is out raising an up to 1 billion euros fund just four years after launching, along with Quantum Light, the VC firm founded by the Revolut founder Nick Staronsky, which we've heard is out raising 2 after only announcing the close of its first $250 million fund last year. So very busy, very buzzy. And we've also seen a lot of fresh new unicorns as well, haven't we, Aina?

0:55

We have, we've seen five. And my colleagues tell me that's the best run of new unicorns for many years in Europe. The last time we saw five unicorns in a week in Europe was in 2022. And these five unicorns are Harmattan AI defense tech company, French Akaido Security, Belgian cybersecurity company And I was speaking to the CEO last week. We have Osapiens, a German climate intelligence software company. We have Cast AI, Lithuanian cloud optimization platform. Very exciting, very cool. Preply, which is kind of like Duolingo as well. It's a US Ukrainian language learning platform.

2:20

Very busy. And then in terms of the funding itself, to break it down, January in total, European startups have raised just over 5 billion euros in both debt and equity, which is actually a bit less in equity than we saw in 2024 and 2025, although we are recording this on the 28th of January. So there's time for a few other deals to sneak in and debt is pretty much on par with, with last year. So maybe a bit early to really tell what, what all that means but, but very interesting that we've had as a said, like a, a big run of unicorns already. Aina, do you think this is a sign of a fruity year to come or do you think this is the phenomenon we often experience as journalists where companies sit on announcements over Christmas and you know, unleash a barrage of information in January?

3:11

Yes, I think there's a little bit of that for sure. Some of these rounds would have been formalized last year, but already we've seen a bunch of 100 million plus companies raise. Muse, the hotel software company from Amsterdam, they're always raising a lot of money. The CEO, I was chatting to him last year, by the way, his dog is called Beyonce, which is very cool. They're doing very well. They've bought 14 companies. And there's the likes of Synthesia, the London AI company, again raised the big rounds this week, $200 million. So yeah, there's a bunch of companies there that are doing very well each year. And at Sifted we have a list of companies that we think are going to announce big raises. We have to try and confirm them, but we have a little hit list that we're working on.

4:06

Yeah, and we also this week at Sifted we published, we're publishing, we're publishing over the course of the week and we're only on Wednesday and please do go check it out. A report Sifted predicts. And this is us looking at what we expect to take place in Europe both in terms of the companies that we are, you know, most excited about that we think are going to have a really big and interesting year. Also the, the cities, the geographies that are kind of on the rise, what we expect from investors. And Ana, as part of that, we listed, didn't we, 26 startups, 26 startups for 2026 that we're going to be really paying attention to. They include companies like the rocket launcher ISA Aerospace, the smart ring maker Aura, which Bloomberg reported I believe just this week or the end of last week is planning to do a big old secondaries round and N Scale, the AI infrastructure startup which we spoke about on a recent podcast. But Ana, which which are your pick of the 26 and why you've spoken to quite a few of them, haven't you?

4:59

Yeah, I think, I think the big no brainer on the list is probably the new Yann Lecun Co. AMI or AMI, I don't know which the pronunciation is right but that's going to start with a big bang. It's already getting a lot of press attention, sifted, wrote about it a bunch of times. They've picked a very interesting CEO, the co founder of Nabla. And NABLA is this transcription tool for doctors and they're doing very well in the us selling a lot. So that seems like a very canny pick one X for sure. They're creating Humanoids, it's a Norwegian US company. And yeah, these Humanoids have kind of split opinion online. They were quite ridiculed actually last year when they did a promo video. Turns out they have limited autonomy. There's going to be a guy wearing VR headsets controlling these robots. You're going to have a stranger in your home and that's going to be for the early adopters. I that's. It's going to be fascinating to watch. But yeah, there's a long way to go in those Humanoids. Isar Aerospace, they're going to do a bunch of launches. Fascinating. There's a long way to go to catch up with SpaceX. They did 150 launches last year. There's no company in Europe capable of launching a single rocket yet. So Isar Aerospace is a no brainer as well. What about you Amy, what companies stood out to you on the list?

6:07

Well, I think yeah, obviously AMI Labs, which is sort of working on these so called world models which we will try to understand and explain better to you as it becomes apparent to everyone what exactly they are. But this is that AI is moved beyond the LLMs and that these models are sort of the way to go. I think what you say about robots is very interesting that there's a lot of money and attention going into that space at the moment, but a big conundrum that we've been writing about is that these companies need a lot more data than they have about the real physical world. And as a result of some of those, you know, the robot's still not entirely understanding how the physical world works in the way that a human would. You do have these funny situations where there's actually a bloke in a robot suit sort of teaching the robots what to do in certain situations which feels at once like we're really in the future. And also quite old school, which I find pretty amusing. What about which companies didn't quite make the the list? Now we had, we had quite a long list, didn't we? What was. And also what was our. What was our logic like? What really helped companies make that top 26?

7:42

I mean it was really hard to come up with 26 companies. There was a long list, yeah. I mean there's companies like Revolut which aren't on there and maybe that's a bit crazy for some people, but we just decided it's a given Revolut is going to be watched no matter what. So we just decided to give that space to someone else. We wanted to find a bit of room for a few wildcards as well. There's the smaller companies on there. I picked a company called Level Zero Health. They're trying to make a wearable that will go on your arm and track hormones in the body, which apparently is very hard to do. And they're super young, they have a long way to go. They're only pre seed level but speaking to the two founders, you just kind of believe they have something and they're very convincing. So we had to get them on there. We have a Lithuanian company called Astrologes which are working and building a ground station in Greenland at the moment. So we thought, well that could be a U.S. territory by the end of the year, who knows? So we just thought that's very interesting. We have to put them on the list.

8:59

And then on the Sifted Intelligence team, for anyone listening who doesn't know, we track all of the deals taking place in Europe. So Aina's team have a really fantastic overview of not just which sectors are on the up, but also which cities, which investors are super active when it comes to sectors. Ana, which ones are we seeing a real hive of activity around at the moment?

10:12

Well, AI of course, but yeah, we're not going to speak about AI too much, hopefully, but other sectors like robots, which is kind of AI actually physical AI it's been called now it had a very big year last year, I think the deal making was up over 100% around Europe especially in places like Zurich and Paris and London. So robots is very interesting. Some people think there could be a mini bubble here. Certainly some of these humanoids don't look ready. They struggle to do tasks that we take for granted. So that's definitely an interesting sector to watch. Otherwise, cybersecurity. We mentioned this company, Akaido Security, that became the fastest cybersecurity unicorn in Europe, so that the CEO of Akaido, Willem, makes a convincing case that there's just so much AI code going to be created in the next few years. This all carries a security risk. Companies like Lovable are actually hiring security experts to try and tighten that up a little bit. So I'm sure they will. But he just sees a big opportunity here for all this AI code that's going to be created. Biotech, of course, has to be a big year. Some of these big pharmaceutical giants are going to lose the patents on some of their most important medicines. They have to go to the market, they have to try and find new innovations, advanced materials. We have a hunch about this sector because China has a chokehold on a lot of critical minerals components. There just has to be new materials found and the US is already investing heavily in this, in this sector and Europe is probably going to have to do the same.

10:38

To back that up with a few numbers from our report, if we look at cybersecurity alone, it saw an 84% increase in equity funding in 2025. So already clearly on the up. I met with, I did the rounds of a bunch of investors in London who all have their Office in within 15 minutes of each other in Fitzrovia, it would, it would seem. And I heard about a bunch of very buzzy early stage cybersecurity deals that sifted will hopefully be able to scoop and we can talk about on the pod sometimes sometime soon. Have you figured out what is so sexy about cybersecurity though? Why has it gone from something people would maybe people like me at least would maybe roll their eyes at and groan and think, oh God, how can we, how can we write a compelling story about this to something that is really catching people's attention?

12:27

Because AI has just lowered the barriers to committing cyber attacks. You know, we can get phishing emails now without typos, which is great. The Nigerian prince who, who sends us all these phishing emails has no spelling mistakes anymore in his emails. So yeah, I think there just has to be a response to all this AI. We need AI to go after the bad AI and there's a lot of paranoid Companies now that are warning about these awful cyber attacks. There was a few really bad attacks actually in the UK last year on Marks and Spencers and Jaguar over as well. So you know, people are quite jittery about this.

13:21

Yeah, I've also spoken to some investors who've said, you know, this, this is a topic at board level of, you know, any sensible responsible company. You know, this is the serious if companies aren't taking their sort of cyber security resilience seriously enough, that's posing a risk to the business. And so it's, it's becoming more of a topic and if it becomes topic at board level then it's also going to become something people put money behind. So good time to be in that sector. But despite the flurry of funding activity we mentioned at the top of the pod, we, we surveyed a bunch of investors, didn't we? We surveyed over 200 investors about their 2026 plans and they told us that they're expecting to do around about the same amount of investments this year that they did last. Although they also said they would expect more quality deal flow in terms of the sectors they're most bullish on. Listeners will not be surprised to learn that AI agents, defense tech, robotics were popular answers along with cyber security. Was there anything else that stood out to you from the investor survey and the answers that they gave us?

14:06

Aina well I think what was interesting there was a lot of answers to suggest that VCS now have to go after companies a bit earlier that the series A round has shifted to the seeds round in terms of importance and emphasis for VCs. They just have to capture these promising AI companies as quickly as they can and round sizes for these pre seed seeds deals are just going up and up. Otherwise there was some talk about, you know, is the world over committing to data centers. You know, a lot of VCs got back to us to say there probably is an AI bubble even though they don't seem too concerned about it. But perhaps if there is this over commitment to data centers and you know, takes a long time to build these data centers and for them to come online, there could be some kind of cracks start to show. Maybe there's a knock on effect if some of these data centers just don't happen as quickly as people expect them to.

15:22

I think the point about how VC sort of sourcing and deal flow is evolving is interesting as well. This isn't from the survey itself but from kind of conversations I've been having with people. I think it's apparent that Some of the activities that were very popular maybe three, four, five years ago amongst VCs, for example, angel programs and scout programs seem to have very much sort of fallen off of the priority list for investors. And we've heard that lots of funds have scaled them back over previous years. But I'm increasingly hearing about, you know, reasonably established European funds that have a fund of funds strategy. Not that, not that they necessarily talk about it, but they are actively investing in micro VCs, solo GPS. This rise of, you know, operators who also do deals as a way of being very close to, you know, those super interesting AI companies that are spinning out of bigger AI companies or you know, fintechs. And I've also, we're increasingly, and I know Aina, you've covered this a fair bit, hearing about the hackathons that happening all over Europe, often in collaboration with some of the buzzier AI companies and VC seem very keen to be tapped into those communities to meet those AI founders super early.

16:30

Yeah, it's a little bit counterintuitive by the way that they're scaling back the scout programs. Do we know why? Has there been any, any chat about that?

17:57

This is just completely anecdotal. I heard that, you know, it was often the case that when a fund run ran a scout program there would be a handful of people who were very, very good, who had very, very good deal flow and then there were a whole bunch who, who weren't so good. But I also wonder if it's. Again, I'm just hypothesizing here. I also wonder if it's to do with the fact that because there are so many more of these solo gps or very, very tiny VC funds that manage to raise and there are an increasing number of founders and operators who have, you know, maybe done a few secondaries, they've got a bit of capital to play with. They're still very much involved in the companies that they run but as a result of that they've got heaps of, you know, amazing talent coming and knocking on the door. All the, that they sort of, they don't need the funds capital anymore. You know, they can, they can do a perfectly good job of investing in dozens of companies all by themselves and they don't need a Sequoia or an index or whoever to give them a hundred thousand pounds a year to do that. I wonder if that's kind of part of the evolution and that maybe also you as a startup raising money would rather take money from, you know, Thomas Wolfe, the one of the co Founders of Hugging Face is a name we increasingly hear at the moment investing in lots and lots of interesting companies. You can understand why you'd rather take money from him. He's still in his company, he's still super well connected rather than, you know, someone who's it's not their own money in the same way if they're. They're investing it on behalf of a fund.

18:07

Oh, very interesting.

19:54

And then last week on the podcast we had Linda Rotenberg who's the CEO and founder of the Global Entrepreneurs Network and Investor Endeavour and one of the European ecosystems she flagged as a real up and comer is Spain. Where was Spain on our to watch list in our predicts report?

19:55

Yes, this is something we wrote about quite a bit last year. Spain deal making was. Is way up. I actually don't have the figure to hand but it shot up last year. Barcelona Madrid doing very well. It's just a nice place to live I guess for, for people and talent is a little bit cheaper. Maybe startups are. The valuations are a little bit smaller. So people VCs are seeing opportunities here potentially overlooked in the past. But yeah, certainly had a great year. People we chatted to gave a lot of credit to the government as well for encouraging some of this activity, beckoning some of these pharma companies to come and set up. There's a lot of biotech activity, med tech activity, a lot of health tech raises last year. I think Spain is the place where the most clinical trials happen in Europe. So they've set out to do something here in healthtech and it's paying off. So yeah, Spain is doing quite well.

20:16

They've also announced a big sovereign wealth fund which I think they're still raising and it's unclear how much exactly will be allocated to venture but that could be quite a, you know, set off quite a flywheel as well I, I imagine. Which other ecosystems do you reckon ones to keep keep a close eye on? Book a book a flight to sometime soon.

21:20

We mentioned Warsaw in the sifted guide that we put out. We feel a little bit guilty at sifted. We don't write about Warsaw enough. Perhaps some of the founders we chatted to said there used to be defense conferences in Warsaw and there was no startups there. It's very different now. It used to be very secretive with the big defense companies not speaking to smaller companies. There's a bit more openness now. So yeah, things are happening in Warsaw.

21:43

And any other anywhere else that might be a dark horse this year.

22:14

Well actually I mean, we mentioned Talon, and that seems a little bit obvious to pick Talon, but it was a bit curious for us last year. They didn't seem to have as many raises as some of their neighbors, and they didn't seem to be churning out some of these great AI companies. And you know, Estonia has a great record when it comes to tech companies, and it just might be the case that, you know, young founders now are probably maybe doing something else. They're starting defense tech companies because of course they have a very tricky neighbor in Russia there. So that could be part of the explanation. I did chat to someone though, and he said, well, you know, it takes a little while. I mean, Estonia's 1.3 million people. They can't keep up with Silicon Valley and the early investment of AI. Later down the line, he betted or he bet that Estonia would find some interesting applications. It would do well, but it just takes a little bit of time to see some of those results.

22:18

And I think that is all we have time for. Without giving away too many spoilers from our Sifted Predicts report, which please check it out on our website. And if you want to hear more from us, please sign up to Sifted's daily newsletter. And if you'd like more access to the amazing data and insights that AINA digs up every day, please check out Sifted Pro. Prices for Sifted Pro are actually going up very soon, so if you get in there quickly, you can subscribe. Before they go up, we will drop links in the episode Description as always, please rate, review and share the podcast, which was, as always, produced by the outstanding Maya Duran, Paul Gombe.

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