For the first time, Paris has surpassed London as the leading tech hub in Europe, igniting new worries about the UK’s ability to sustain its international competitiveness in the rapidly expanding technology industry.
As per Dealroom’s recently published 2025 Global Tech Ecosystem Index, the French capital has established itself as the sole non-American city in the top five global startup ecosystems—an honor that has conventionally belonged to London, which has maintained its dominance in the European tech scene for more than ten years. This report evaluates startup ecosystems based on factors such as venture capital funding, talent availability, and the market value of tech companies, among others.
Although London has received a greater amount of venture capital than Paris in the past few years, the UK city falls short in terms of the growth of enterprise value. From 2017 to 2024, the enterprise value of tech companies located in Paris increased by more than fivefold, whereas London experienced a 4.2-fold growth. Enterprise value represents the overall value of startups based on factors such as investment trends, exit valuations, and successful scaling.
A significant portion of Paris’s recent success can be attributed to artificial intelligence. Almost half of the city’s $7.8 billion (£6.1bn) in tech investment last year was funneled into AI-centric enterprises, including notable companies like Mistral AI, software startup Poolside, and clean mobility company Electra. French President Emmanuel Macron has prioritized AI in France’s innovation agenda, pledging to position the country as a global frontrunner in technology. The government has recently supported several initiatives, including €500m in public funding directed towards AI research and the growth of startups.
In contrast, London is grappling with a series of challenges that raise doubts about its capacity to cultivate and retain domestic tech talent. Most recently, London-based AI unicorn Builder.ai collapsed amid internal issues and stagnating revenues. Earlier this month, food delivery service Deliveroo confirmed a £2.9bn acquisition deal with its larger US competitor DoorDash. Additionally, fintech leader Revolut revealed plans to extend its presence in Europe from Paris, despite being based in London, a strategic shift linked to the firm’s continuing struggles to obtain a UK banking license.
“The acquisition of Deliveroo is yet another distressing instance of a British success story being acquired by an American conglomerate,” remarked Mark Pearson, CEO of London-based venture firm Fuel Ventures. “This is a clear indication that the UK is losing its ability to scale and keep its tech champions.”
Roxanne Varza, director of Paris-based Station F—Europe’s largest startup hub—pointed to government support, expertise in AI, and a rising group of repeat founders as pivotal elements fueling France’s growth. “The ecosystem has truly accelerated over the past few years, primarily thanks to AI talent and a new generation of serial entrepreneurs,” she noted. “More international funds are establishing solid teams here because they see great potential.”
Despite these ongoing changes, London continues to outperform Europe in terms of AI investment amounts. UK-based AI startups garnered $3.5bn (£2.7bn) in 2023, surpassing Paris’s $2.4bn (£1.9bn), while Munich followed with $763m (£602m), according to Dealroom statistics. The UK also maintains its strong position in deep tech and life sciences—a sector that was recently reinforced by German biotechnology leader ‘BioNTech’s announcement of a £1bn expansion in the UK. The firm will establish an AI center in London and research facilities in Cambridge as part of a decade-long R&D strategy.
