The recent $116m funding round for Paris-based Mistral AI, just a month after its launch, highlights the potential of open source startups that should not be underestimated. While the US remains a dominant force in commercializing free code, Europe possesses a wealth of engineering talent driving the emergence of open source startups across the continent.

Europe is witnessing a rise in prominent open source businesses like London’s StabilityAI, securing $101m for its open source sketch-to-image generative AI tool, and Helsinki’s Aiven, which raised $210m in a Series D funding round for its open source cloud data platform last year. These success stories demonstrate the increasing visibility of open source ventures in Europe.

Despite the growing prominence of open source startups, some investors find it challenging to fully grasp the business value of giving away software for free. Sifted, inquiring about the most promising startups in the field that are not part of their portfolios, asked several venture capitalists for their insights.

Deepset.ai (Germany)

Deepset.ai provides open source solutions that empower programmers to build natural language processing systems, covering everything from initial prototyping to deployment and ongoing monitoring. These systems are instrumental for enterprise customers as they allow them to derive meaningful insights from their data by simply posing plain-language questions about intricate datasets.

What sets the company apart is its focus on addressing the German language, a significant advantage in a market that predominantly revolves around English-based solutions.

Coqui.ai (Germany)

Coqui.ai utilizes generative AI within its open source technology to produce voice content for diverse applications, including video game development, dubbing, and post-production. With the continuous progress of voice technology, Coqui’s open source approach enables developers worldwide to actively participate in enhancing voice interfaces for different languages and dialects.

Mistral AI (France)

Mistral, a French AI startup, boasts a remarkable team of talent, including professionals from renowned companies like Google’s DeepMind and Meta. This impressive lineup positions Mistral as a highly promising company committed to its mission of “making AI useful” and aspiring to become a leading AI player in Europe, rivaling America’s OpenAI. Emphasizing an essential shift in the AI market, Mistral’s founders are dedicated to promoting open source models instead of proprietary ones.

By taking the initiative in developing foundational models that align with European values, Mistral aims to generate invaluable data that will greatly benefit European technology. This effort is expected to spark new waves of innovation across the continent, establishing Mistral as a pivotal contributor to the European AI landscape.

Jina AI (Germany)

Jina AI is an exceptional commercial open source software company, distinguished for its robust multimodal AI platform. Within a remarkable span of 20 months, they have successfully raised an impressive $37.5 million. Their platform empowers enterprises to conduct all-encompassing searches across a wide array of data types worldwide. With its revolutionary capabilities, Jina AI is poised to transform the search market, emerging as a highly sought-after AI-driven search application.

Medusa (Denmark)

The open source movement spans a wide spectrum of products, ranging from developer-focused tools to comprehensive business software. A prime illustration of this is Copenhagen-based startup Medusa, which focuses on the commerce tech stack. Medusa provides numerous modules that facilitate the creation of personalized digital commerce experiences, making it an excellent representation of the diversity within the open source wave.

SurrealDB (UK)

In 2021, the preference for open source tools in the realm of databases exceeded that of closed source, establishing open source as the primary and default approach in this market. London-based SurrealDB follows this trend by adopting open source to develop its multi-model database. Their product stands out with distinctive features such as a proprietary SQL-like query language, an API layer, and various other functionalities, setting it apart from traditional legacy databases.

Quickwit (France)

Search and analytics engine Elasticsearch was a pioneer in the domain of open source search platforms. However, due to an unprecedented surge in data growth, this field has witnessed significant advancements. Among the innovative players is Paris-based Quickwit, which stands out by constructing a high-performant search solution designed specifically for modern cloud-native environments.

Passbolt (Luxembourg)

Passbolt is dedicated to enhancing information security practices through the development of an open-source password management software. The software facilitates the centralization of passwords, prevents teams from using the same password across multiple systems, and boosts password strength. Moreover, it empowers team members to securely store and share their credentials, ensuring a robust approach to safeguarding sensitive information.

Lago (France)

Lago positions its open source product as a viable alternative to Stripe billing. With their software, Lago offers an automated billing solution that empowers growth teams to extract and transform data without the need for engineering support. This streamlined approach allows businesses to efficiently manage their billing processes and focus on growth without unnecessary technical dependencies.

Theta (Italy)

Theta is a no-code app builder that aims to expedite UI design by allowing the direct creation of remote interfaces within the app. By integrating this software into their current workflows, developers can ensure smooth implementation while upholding code quality. This approach streamlines the process of building applications, making it faster and more efficient without compromising on the overall software integrity.

Qdrant (Germany)

Qdrant provides a high-performance vector database tailored for AI applications. Instead of traditional data storage methods, Qdrant stores data as vectors, representing complex datasets with multi-dimensional mathematical representations of features or attributes. This unique approach allows for efficient handling of intricate data structures. Additionally, Qdrant offers a managed database as a service (DBaaS) in the cloud, making it easier for users to adopt the product with minimized resource requirements and costs.

Conclusion

Highlights the potential of European open source startups. Successful ventures like StabilityAI and Aiven demonstrate the rising prominence of open source in Europe. VCs recognize Deepset.ai, Coqui.ai, Jina AI, Medusa, Quickwit, and others for driving innovation and challenging closed-source dominance.