Black Forest Labs, a German AI image-generating startup, says it has raised $300 million at a $3.25 billion valuation, marking one of the largest investments in a Europe-based AI startup this year. Its funding comes as investment in the continent’s AI sector overall, while still lagging far behind the U.S., has risen this year.
New backers Salesforce Ventures 1 and Anjney Midha (AMP) co-led the financing, which included participation from a slew of other investors, including Andreessen Horowitz, Nvidia, Temasek Holdings, Bain Capital Ventures, Air Street Capital, Visionaries Club, Canva and Figma Ventures.
Founded in 2024, Black Forest has raised a total of $450 million in funding, per Crunchbase data. Its headquarters are in Freiburg, Germany, but it also has a lab in San Francisco. The company is known for its Flux foundation models of AI generation. It touts that its open models are “the most popular image models” on Hugging Face, and that companies such as Adobe, Canva, Meta and Microsoft are “building” on its models.
The startup has received attention not only for the fact that its models help generate images, but also for the fact that they help edit them, too.
Europe’s AI scene slowly gains traction
Europe as a whole has lagged the U.S. and China in the race for global AI dominance. However, a number of players such as Black Forest Labs are making it increasingly competitive. The continent saw $5.2 billion invested in its AI startups in Q3, up from $2 billion in the same quarter last year, per Crunchbase data. (Still, that remains a fraction of the $35.7 billion that went to North American AI startups in Q3.)
Largest fundings for European AI startups
In early September, Paris-based generative AI startup Mistral AI announced a roughly $2 billion Series C round. Per Crunchbase data, Mistral’s Series C marked the largest-ever venture round raised by a European AI company.
Black Forest Labs’ massive raise is notable in that it means that Mistral AI is no longer the only GenAI play near the top of the rankings of the largest European AI rounds. After Mistral, here are the four next-largest AI equity funding deals for Europe-based startups, per Crunchbase data:
- Nscale, $1.1B, Series B: London-based AI infrastructure company Nscale raised $1.1 billion in a September 2025 round led by Aker at a $3.1 billion valuation. (Just one week later, it raised a $433 million “pre-Series C SAFE.”)
- Wayve, $1.08B, Series C: London-based autonomous driving software developer Wayve raised $1.08 billion in a May 2024 Series C led by SoftBank.
- Celonis, $1B, Series D: Celonis, a provider of “process mining” tools for businesses to find and fix inefficiencies, which has headquarters in Munich and New York, secured $1 billion in a 2021 funding round.
- Helsing, $700M, Series D: Helsing, a developer of AI-enabled autonomous systems for the defense industry, including drones, raised $700 million in a June 2025 funding round.
(For additional context, here is a list of all European AI-related financings of $200 million or more from the past five years.)
Despite the impressive fundraises, Europe’s largest generative AI startups are still valued quite a bit lower than their U.S. counterparts. San Francisco-based Anthropic is now valued at $183 billion, and OpenAI in October completed a secondary share sale amounting to $6.6 billion, giving it a $500 billion valuation.
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Illustration: Dom Guzman
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