Europe slips, AI surges: Key takeaways from the GSER 2025 report

Startup Genome, in collaboration with the Global Entrepreneurship Network, unveiled its 2025 Global Startup Ecosystem Report (GSER) today at VivaTech in Paris.

The report, now in its 13th edition, ranks the world’s top startup ecosystems using data from over 5 million companies across 350+ ecosystems.

The Global Startup Ecosystem Report (GSER) is developed in collaboration with several key partners: the Global Entrepreneurship Network, Dealroom, Crunchbase, Pitchbook, Bella Private Markets, and Tracxn.

The 2025 edition offers practical guidance for policymakers, ecosystem leaders, and founders. Its goal is to help them create evidence-based strategies that bolster startup communities, which are vital engines of job creation and economic growth.

Global Startup Ecosystem Ranking

According to the report, 2025 has seen a sharp decrease in Ecosystem Value globally, down 31 per cent in aggregate, marking a significant break from years of sustained growth. The shift is closely linked to a downturn in major exits and IPOs.

The top 15 global startup ecosystem rankings are: 

#1 Silicon Valley

#2 New York City

#3 London

#4 Tel Aviv

#5 Boston

#5 Beijing

#7 Los Angeles

#8 Seoul

#9 Singapore

#10Shanghai

#11 Tokyo

#12 Paris

#13 Philadelphia

#14 Bengaluru-Karnataka

#15 Seattle

Here are some of the key findings in the global startup ecosystem:

AI and Big Data experienced significant growth, becoming the fastest-growing sub-sector with a 33 per cent increase in venture capital (VC) funding. This sector now accounts for 40 per cent of all global VC investment, rising from 26 per cent in 2021.

In contrast, the total number of large exits among last year’s top 40 ecosystems decreased by a concerning 31 per cent. However, some ecosystems managed to defy this trend; these include Shenzhen, Tokyo, Seoul, and Shanghai, along with Paris and Philadelphia.

Hong Kong made the most significant improvement of all top 40 global startup ecosystems, jumping up from the emerging ecosystems ranking in 2024 to #27 globally this year.

Bengaluru-Karnataka reached #14 in the top 20 ecosystems, an impressive improvement of 

seven positions from last year.

Top European Startup Ecosystems in 2025

Despite a global 31 per cent decline in ecosystem value, several European hubs have shown resilience. Here’s how European cities stack up in this year’s global rankings:

London (#3 globally)

Once tied with New York for the #2 spot from 2020 to 2024, London slips one position but remains Europe’s top-performing startup ecosystem.

Paris (#12 globally, up 2 spots)

Paris is the only major EU capital to gain ground this year, propelled by a surge in early-stage deals and unicorns. The city is also one of the few globally to buck the downturn in large exits — notable among them, BeReal’s $542M exit in 2024.

Madrid (#40 globally, debut in Top 40)

Madrid makes its first appearance in the global Top 40, graduating from the Emerging Ecosystem list. The Spanish capital was lifted by strong exits such as Movistar Riders’ $6.3B valuation, reinforcing its rise in gaming and esports.

Birmingham (UK, #21–30 among Emerging Ecosystems)

Birmingham, UK moved into the #21-30 Emerging Startup Ecosystem ranking, backed by improved performance in the Performance metric, measuring the size and performance of an ecosystem based on the accumulated tech startup value created from exits and funding.

A region in flux

According to GSER 2025, Europe’s startup ecosystem value dropped 24 per cent over the past year, trailing behind only Latin America declining.

However, regional bright spots like Paris and Madrid hint at a shifting power balance.

Meanwhile, with 90% of AI funding concentrated in the US and China, European cities are now pressured to develop AI-native startup strategies — or risk being left behind.

New Metric: The AI Factor

For the first time, GSER introduced the “AI Factor,” measuring how well ecosystems are transitioning to AI-native models. Paris stood out here again, with the number of AI-native startups doubling between 2021 and 2024.

Top ten ecosystems in Europe

Here are the top ten ecosystems in Europe: 

1. London
2. Paris
3. Amsterdam
4. Berlin
5. Stockholm
6. Zurich
7. Munich
8. Madrid
9. Istanbul
10. Copenhagen

“We’re at a pivotal moment 2 years into the AI era of exponential startup ecosystem growth. Ecosystem Values corrected down 31% yet some are pulling ahead: those investing in the accelerated creation and support of AI-Native startups (rather than putting 100% in AI infrastructure and adoption). The future belongs to nations and cities that combine bold

vision with new AI-native startup policy action to hitch the AI wave. In response, Startup Genome is launching a global entrepreneurial AI policy coalition to support ministries and agency leaders,” says JF Gauthier, Founder & CEO, Startup Genome