Austrian Startup Investments Plunge 65% in First half of 2025, EY Reports

Vienna, Austria – Austrian startups are facing a challenging investment landscape, with the total financing volume dropping to €110 million in the first half of 2025, a staggering 65% decrease compared to the €305 million recorded during the same period last year. this marks the lowest half-year value since 2019, according to the “EY Startup Barometer” [[1]].

Sharp Decline in Startup Funding

The EY analysis reveals that while the number of capital rounds remained relatively stable at 74, the average investment level has substantially decreased.The absence of significant financing rounds, with the largest being €15 million for Emmi Ai, contributed to this downturn. The average financing volume per deal has fallen to just under €2.0 million, the lowest value in the ten years EY has conducted the survey.

Did You Know? Austria’s startup ecosystem benefits from a network of early-stage investors and venture capital firms [[2]].

“A wake-Up Call” for the Austrian Startup Scene

Florian Haas, Head of Startup at EY Austria, described the situation as a “wake-up call,” stating that the historically low financing volume puts the positive growth of the Austrian startup location on the brink. He noted that while some startups managed to complete financing rounds, the amounts are shrinking, leading to low liquidity and startups struggling to stay afloat.

Early-Phase Funding Hit Hard

EY’s report highlights a significant decline in early-phase financing rounds, traditionally a strength of the Austrian startup ecosystem. capital rounds below €1 million have decreased by 20%, falling from 41 to 33. This shortage of capital affects startups in all phases,from early-stage foundations to international scaling,hindering innovation across Austria.

International Investors Retreating

The report attributes the decline to a fragile global investment mood and Austria’s tense overall economic situation. Unlike the recovery seen in other European countries, Austria is experiencing a retreat of international investors who are shifting their focus to more economically stable regions. haas suggests political measures,such as a roof fund and participation allowance,are needed to improve the financing situation.

AI Sector: A Partial Exception

Artificial intelligence (AI) startups have shown some resilience amidst the general decline. Almost a quarter (24%) of the funding rounds involved startups with a clear AI focus, totaling 17 rounds. These AI startups attracted €42 million, representing 38% of the total risk capital. while the percentage remained constant compared to the previous year, the absolute sum is significantly lower than the €117 million invested in AI startups in the first half of 2024.

Haas believes that the AI boom is still present but not fully reflected in investment numbers. He anticipates a shift from hype to the operational basis of many business models, with a growing emphasis on capital efficiency.

Sustainability Startups Face a Low Point

In contrast, sustainability startups are experiencing a new low, with only €7 million (7% of the total value) invested in this sector. This is the lowest value as 2022, compared to the record in the second half of 2024, when sustainability startups accounted for 46% of the total investment volume.

Pro Tip: Startups can explore accelerator and startup programs for expert guidance,networking,and funding opportunities [[3]].

Austrian Startup investment in Decline: Key Metrics

What strategies can Austrian startups employ to attract more international investment? How can the Austrian government better support early-stage funding for innovative companies?

Disclaimer: This article provides general information about startup investments and should not be considered financial advice. Consult with a qualified professional for personalized guidance.

Share your thoughts in the comments below! What steps do you think Austria should take to revitalize its startup investment landscape?