If 2025 was about the shock of funding drying up, 2026 is about the sobering reality of what survives in a high-interest, high-regulation, AI-saturated world. For a third consecutive year, The Recursive surveyed 22 leading VC firms across Central and Eastern Europe to reveal how investors are thinking about sector priorities, risks, and opportunities shaping the 2026 investment landscape.
We published a general overview at the end of January, and as we moved further into 2026, more and more reports and predictions came in, enabling us to put regional investment sentiment into a broader perspective. One thing is sure, geopolitical instability and AI disruption remain the two biggest pillars of risk, as well as the primary drivers of opportunity.
Below, we consolidated regional insights on challenges and opportunities specific sectors might face, connecting them with the global context and trends that impact investment dynamics.
What is hot?
AI, AI, and more AI. There is no doubt AI solutions have become prevalent. In fact, 45% of regional investors mention “anything AI related” as part of their investment strategy. That is why for the purpose of mapping sector trends, we will keep AI analysis separate (coming in tomorrow). Here we look only at industries that are going to get more attention in 2026.
1) Deep Tech
Deep tech effectively can span across sectors, so it is hard to pinpoint where it begins and ends. For the purpose of this article, we take that it comprises robotics, quantum and space tech, among others – which were mentioned as points of focus by regional VCs. The core is always the same though: companies that turn scientific and technological breakthroughs into scalable, value-generating businesses (that can, hopefully, also positively impact and advance society).
Europe has immense opportunity in deep tech space. With highly educated workforce, world-class research institutions, and a deep industrial base, it could become a global leader in launching and growing deep tech companies. There are barriers, not just specific to the sector, like fragmented geographic markets and limited growth capital. However, as McKinsey’s experts assessed, if Europe can harness its strengths and overcome some of the barriers, this new (science-led tech) economy could collectively create $1 trillion in enterprise value and up to one million new jobs across Europe by 2030.
This potential is recognized more by ever day. We can see it the best in EU’s commitments and programs. In October 2025, The European Innovation Council (EIC), part of the EU research and innovation programme Horizon Europe, will support European deep tech research and high-potential startups with €1.4 billion in 2026. It marks and increase of nearly €200 million in comparison with 2024. In addition to a bigger budget, the 2025 work programme brings several improvements, including better access to scaleup equity funding with the EIC Strategic Technologies for Europe Platform (STEP) scale-up scheme.
2) Defense Tech
As we have written in our full analysis on CEE VC’s Insights, the investor views on Defense Tech in 2026 remain mixed. Some respondents indicated that Defense Tech is becoming a more important part of their investment approach, with a few noting it has been in their focus for a few years now. Despite their investment thesis, when assessing the investment dynamics in the region, in general, most of them confirm: Defense is here to stay.
For CEE investors, Defense is practically inevitable sector taking into account the CEE’s geopolitical position, and as Presto’s Tichomir Jankut explains, this focus is only going to get sharper.
“It’s critical to realize Europe is still largely playing catch-up when it comes to its own defense and security technologies. Substantial defense budgets have been announced and will need to be deployed over the coming years, creating strong revenue potential for startups developing technologies that strengthen European security and sovereignty.”
He also notes that 2026 is likely to bring a marked increase in meaningful government contracts awarded to startups in defense and dual-use technologies, accelerating R&D cycles and pushing the entire sector forward.
3) Cybersecurity
Cybersecurity funding hit its highest level in three years, Crunchbase reports. Overall, investors put $18 billion into funding deals for cybersecurity companies in 2025 — the third-highest annual total in 10 years, only behind the peak years of 2021 and 2022. The numbers are boosted by big rounds for AI-focused companies in the space and a pronounced growth at early stage. Higher funding also coincided with big M&A and IPO deals last year.
Altogether, the numbers paint a rosy picture for the industry, with positive impact spreading into 2026. CEE investors agree as well; they report it among their top 3 sectors in focus.
4) Health & Bio Tech
Healthcare and life sciences, including MedTech and healthcare IT, remain attractive due to demographic trends and non-discretionary demand. The region had good traction during COVID years, and some of that effect is still strong. In fact, in Poland, health is continuously most popular investing sector. It accounted for 13% of all VC transactions completed in Polish market during 2025.
Most notably, AI-related healthcare is one of the spaces that have seen a significant rise in funding globally, Crunchbase data shows. Overall funding to the space went up in 2025, as more startups are tackling high-pain and high-cost parts of the healthcare system. It is not surprising why. Many healthcare organizations still operate with outdated tech, and the need for innovation is massive.
According to Menlo Ventures’ research, 22% of healthcare organizations have implemented domain-specific AI tools, a 7x increase over 2024 and 10x over 2023. Menlo’s survey also found that 85% of all generative AI spend in healthcare currently flows to startups rather than incumbents.
5) Energy
As Sam Altman recently shared, “the ultimate barrier to smarter AI is energy”. Energy is definitely coming through big doors, but do not mistake it for hype. Besides being AI’s most pressing requirement, many regional VCs we surveyed pointed energy focus is a matter of securing the infrastructure foundations.
“We are putting greater emphasis on sectors that represent critical infrastructure such as energy, cyber security (etc.) as they are dominating in times of geopolitical uncertainty,” commented Belizar Marinov from 11 Ventures.
This reflects on European and global level. At the World Economic Forum in Davos, President Ursula von der Leyen stated three top priorities in building “new Europe”. Alongside creating conducive and predictable regulatory environment and attracting capital, the third priority mentioned was: building an interconnected and affordable energy market – “a true energy union”.
What is lukewarm?
Fintech
Fintech has always been CEE’s forte. However, geopolitical tension, economic uncertainty, and tighter investor margins are forcing fintechs to shift from growth-at-all-costs toward clearer profitability paths. With that in mind, the 2026 might show up to be pivotal, as Europe’s fintech ecosystem navigates regulatory evolution (from PSD3 to MiCA implementation).
Simultaneously, AI adoption is accelerating across the sector, though concerns about litigation and an emerging “AI bubble” demand careful risk management. Stablecoins are reshaping payments infrastructure, with nine major European banks now collaborating on a MiCA-compliant euro-denominated offering. The “middle class” of fintech though, is being forced to pivot toward Embedded Finance Infrastructure. If a startup doesn’t own the rails or a specific regulatory license, it is likely being consolidated into a larger banking-as-a-service platform.
Taken into account regional insights, fintech in CEE will continue to evolve and attract investors attention, albeit more likely to cautiously observe than actively participate.
EdTech
The 2026 Global Education Outlook from HolonIQ notes that EdTech has finally found its floor after the 2023–2024 VC collapse. The hype of 2021 is well and truly over, with greater investor emphasis on the path to profitability.
Reports show investors ghost standalone apps in favor of platform-wide integrations and Agentic AI that provides measurable ROI for teachers and corporate training. With the EU AI Act enforcing strict transparency standards for AI in education starting this year, the sector is in a wait-and-see mode as companies re-tool for high-compliance environments.
In any case, technology will continue to drive innovative learning models and experiences, while the gap between research and practice narrows, with a greater emphasis on evidence-based approaches.
Climate & Sustainability
The climate tech sector has seen a decline in VC investment globally after the 2021–2022 boom, even though the broader ecosystem has grown, propelled by AI and adjacent industries. European climate tech faces a $13.5 billion Series B funding gap — that’s according to according to a recent World Fund report featuring Dealroom data. “Companies are failing by lack of capital, not because the technology is shit, or because the business models are shit,” commented Craig Douglas, founding partner at World Fund, at the report presentation event in Amsterdam.
While total funding in 2025 actually ticked up by 8%, the number of actual climate deals dropped by 18%, signaling a feast-or-famine environment where investors are doubling down only on proven winners, reports Sightline Climate. For 2026, the focus is shifting from carbon-offset moonshots to climate adaptation, investing in the unglamorous but essential infrastructure needed to survive a changing planet, such as grid resilience and water stewardship.
What is cold?
Things that regional investors don’t see performing well? First of all, anything without the AI-native features, from marketplaces and SaaS, to AI tools without clear defensibility which are not cornerstone to the clients, but are just good to have.
Next in line is Web3. After years of hype, the space started to mature in 2025, with key advancements in tokenization and stablecoins. In 2026, due to settling regulation, we might see some contraction, as many investors will wait for compliance and institutional adoption to roll in properly. The Wild West era is over; the Bureaucracy Era has begun — great for the long-term, but a cooling bucket for those looking for 100x returns overnight.
The eCommerce gold rush of the early 2020s has finally hit a wall of diminishing returns. Heading into 2026, direct-to-consumer (DTC) is no longer a winning ticket but a survival test as Meta and Google’s ad costs (CPM) continue to skyrocket. For 2026, the marketplace space is also cooling because middle-man tech, which simply aggregate supply without controlling the chain, is facing a loyalty crisis.
The MarTech sector is currently being cannibalized by the very thing it promised to harness: AI. In 2025, the market was flooded with AI slop: low-quality, automated content that consumers have already started to tune out. Investors are pulling back from traditional SaaS marketing tools that only offer incremental efficiency, moving instead toward “Agentic AI” that can actually execute tasks.
The hype for Food Tech, specifically alternative proteins, has officially reset. Following a sharp decline in funding throughout 2025, the sector enters 2026 in a science-first phase. We are seeing a shift from vision to viability, where capital is only flowing to companies with proven manufacturing moats and platforms. The sector isn’t dead, but it’s definitely cold for any startup that hasn’t solved the fundamental problem of unit economics and consumer skepticism.
In conclusion, some CEE investors are pointing that there will be continued selectivity across all sectors.
“Companies without clear differentiation, distribution, or a well-defined path to sustainable growth may find it more challenging to raise capital. As a result, founders across sectors are expected to be more focused on fundamentals, customer value, and long-term scalability,” pointed from Silicon Gardens.
