[Edaily Marketin, Reporter YunJi Kim ] A peculiar contrast is emerging in the European venture capital (VC) market. While overall investment enthusiasm has cooled somewhat, funds are pouring into certain large startups—such as those in artificial intelligence (AI) and space technology—causing the valuations of unicorns to actually surge. Furthermore, with initial public offerings (IPOs) and mergers and acquisitions (M&As) remaining sluggish, exits for existing unicorns are being delayed, leading to a noticeable accumulation of unicorns in the market.

According to global market research firm PitchBook on the 28th, the combined valuation of 175 European unicorns as of the end of June stood at 609.1 billion euros (approximately 973.2687 trillion won). This represents an increase of approximately 100 billion euros (about 160 trillion won) compared to the end of last year, with 18 companies joining the ranks of unicorns this year alone.

The valuations of individual companies have risen particularly sharply. The median valuation of European unicorns—the value of the company positioned in the middle when ranked by valuation—jumped 50% from 1.6 billion euros last year to 2.4 billion euros in the second quarter of this year. This stands in contrast to the slower-than-usual pace of overall venture capital (VC) investment activity. Rather than a decrease in the amount of capital flowing into the market, investment funds are instead being concentrated on proven, large-scale startups.

As funding has concentrated on a select few large startups, the average investment size per deal has also increased. In the first half of this year, European unicorns received a total of 15.5 billion euros (approximately 25 trillion won) through 47 investment deals. The median investment round size also rose from 140 million euros last year to 175 million euros this year.

Major investments were concentrated in the AI and space technology sectors. Notably, the British data center startup Enscale raised $2 billion in a Series C round last March, achieving a valuation of $14.6 billion. This valuation is more than four times higher than the valuation received in the previous round. In addition, Finnish satellite company Ice.ai raised 1 billion euros in June, achieving a valuation of over 10 billion euros. Its valuation, which stood at 2.4 billion euros in December of last year, more than quadrupled in just six months.

However, PitchBook’s analysis suggests that the increase in the number of unicorns should not be viewed solely as a sign of recovery in the European startup market. It explains that existing unicorns are remaining in the market longer due to slow investment exits caused by sluggish IPO and M&A markets.

Typically, startups are removed from the list of private unicorns once they go public or are acquired by another company. However, in Europe recently, new unicorns have continued to emerge while the exits of existing unicorns have been delayed due to sluggish IPO and M&A activity. This structure results in the number of unicorns increasing as more companies enter the list than leave it.

The pool of candidates is also deep. According to PitchBook, there are 174 “soonicorns” (startups likely to become unicorns soon) in Europe, with a combined valuation of 127.8 billion euros. If large-scale investments continue, particularly in AI, the number of unicorns is expected to grow further in the second half of the year.

PitchBook stated, “The current European VC market is less a ‘market where money has dried up’ and more a ‘market where capital is concentrated in specific areas.’” It added, “While overall investment activity has slowed, in certain sectors—such as AI and space technology—both company valuations and investment volumes are growing simultaneously. Conversely, as the exit market fails to keep pace, the phenomenon of unicorns accumulating without being able to exit is becoming increasingly pronounced.”