European tech investment is concentrated in a handful of cities, according to new data from EY and Dealroom.co. London secured first place in Europe for tech foreign direct investment projects, while Paris, Stockholm, Cambridge, Ghent and Zagreb all recorded notable rankings in separate measures of tech activity.
EY鈥檚 2026 UK Attractiveness Survey found that the UK secured 155 software and IT services foreign direct investment projects during 2025. France recorded 104 projects and Germany recorded 102.
The UK accounted for 18% of all tech related foreign direct investment projects recorded in Europe during the year. London secured 85 projects, more than double the total recorded by Paris.
Dealroom.co鈥檚 Global Tech Ecosystem Index 2026 looked at things like venture capital investment, enterprise value, unicorn creation, momentum and university networks. That research ranked London fourth worldwide.
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How Did London Reach First Place?
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London recorded 85 tech foreign direct investment projects during 2025, according to EY. That total gave the city first place in Europe for tech investment projects.
The capital also recorded a long run of activity. EY reported that London secured 616 tech related foreign direct investment projects over the last five years.
Dealroom.co ranked London fourth worldwide, behind the Bay Area, New York and Boston. The city ranked above Los Angeles, Austin and Tel Aviv.
AI activity has a lot to do with London鈥檚 performance. Dealroom.co reported that AI investment in London reached 鈧�6bn during 2025.
Dealroom.co researchers told Euronews, 鈥淟ast year, London tech companies raised 鈧�15.3 billion, up 45% from 2024, while the city is now home to 138 unicorns, including Wayve, Granola, OLIX and ElevenLabs.鈥�
Peter Arnold, EY UK Chief Economist, said, 鈥淲hile inward investment levels softened globally and across Europe last year amid trade disruption and geopolitical uncertainty, technology remained a reliable and leading source of FDI for the UK.
鈥淟ondon鈥檚 success as Europe鈥檚 leading hub for software investment is clear, but tech鈥檚 contribution to the UK economy extends well beyond the capital. Technology is the leading source of FDI into major cities such as Manchester and Edinburgh, reflecting the UK鈥檚 deep and widely distributed pool of skilled technology talent.鈥�
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What Position Does Paris Hold?
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Paris recorded second place behind London in European rankings focused on tech investment activity.
According to Euronews, the French capital secured 鈧�4.3bn in venture capital funding. Paris is home to companies such as Mistral, AMI Labs and Mirakl.
Dealroom.co reported that artificial intelligence accounts for around 30% of venture capital investment in Europe. Paris hosts many of Europe鈥檚 best known AI companies and research efforts.
London recorded higher rankings in 2026, though Paris continues to record substantial venture capital activity and unicorn creation.
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Which Smaller Cities Recorded High Rankings?
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Not every leading tech ecosystem is located in a major capital city.
Dealroom.co examined cities with populations below 500,000 and ranked Cambridge first in Europe. Ghent secured second place.
The Belgian city has fewer than 300,000 residents. Dealroom.co said enterprise value per capita is particularly high in Ghent.
The research identified Argenx as a major contributor. The biotech company carries a valuation of 鈧�41bn.
Dealroom.co also referenced a growing software sector in Ghent. Aikido Security was named as a recent example.
University connections form an important feature of the city鈥檚 ecosystem. Dealroom.co reported that many founders come through Ghent University.
Those rankings place Cambridge and Ghent near the top of Europe鈥檚 most concentrated tech ecosystems.
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Where Are Tech Ecosystems Growing Fastest?
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Dealroom.co produced a separate ranking focused on ecosystem momentum and growth rates.
Zagreb ranked as the fastest growing tech hub in the European Union. The Croatian capital secured 11th place worldwide.
Athens secured second place within the European Union ranking. Sofia ranked third, Prague ranked fourth and Vilnius ranked fifth.
Kyiv was also in the global ranking, taking eighth place overall.
Dealroom.co told Euronews, 鈥淪eeing central European cities climb here reflects ecosystem momentum.鈥�
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What Do Investors Like About The UK?
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EY surveyed 360 international investment decision makers as part of its research.
The survey found that 57% said the UK performs better than competitor markets for technology talent, including engineers and data scientists and 53% gave positive ratings to the UK鈥檚 startup ecosystem and research institutions.
Data protection regulation also received positive feedback, with 59% rating the UK higher than competitor markets.
AI was mentioned quite a bit in investor responses and 48% said the UK has a more attractive environment for AI investment and development than rival markets.
Roy Cornick, EY UK&I Technology Lead, said, 鈥淟ondon鈥檚 continued dominance as Europe鈥檚 leading destination for technology investment is underpinned by a highly skilled workforce, a mature and well-connected ecosystem of global tech companies and scale-ups, and strong access to financing.
鈥淲hile the Capital remains a critical asset to the UK鈥檚 tech ambitions, investor sentiment also points to confidence in the broader UK proposition, with the UK viewed as one of the most attractive markets globally for AI investment and deployment.鈥�
