As winter sets in and headlines warn of higher energy bills and renewed inflation, Europe's founders and investors are reporting a notably brighter outlook — provided EU leaders act quickly on the policy changes they say are needed to keep that optimism alive.

New data from the European Impact Index 2026 (EII), compiled by Norrsken, the European impact investment group, finds that founders and funders are doubling down on building the clean electro-economy Europe needs to break its dependence on fossil fuels, and that their confidence in Europe's ability to deliver is growing.

The EII is an annual survey of 750 entrepreneurs and investors behind the companies working to solve Europe's hardest problems. Of the investors surveyed, one in two said Europe has become a more attractive place to invest over the past 12 months, against one in four who said it has become less attractive.

Founders are also gearing up for growth, with 85% expecting revenues to rise over the next 12 months and three in four planning to increase headcount — a marked shift in mood at a time when the wider economic picture would suggest the opposite.

A warning for Brussels

The same data, however, came with a clear warning Brussels. It revealed that a significant share of European founders are keeping one foot out the door, and that investors remain only cautiously optimistic about the political backdrop in which they operate.

A stark one in three founders said they had considered relocating their company outside Europe in the past twelve months, including 15% who considered it seriously. Many said they were driven by high energy costs and other factors making it difficult to compete globally. Others cited recruitment challenges — almost four in ten said attracting top talent is harder in Europe than in the US.

Meanwhile, around 36% of investors surveyed in the EII rated the EU's approach to innovation and entrepreneurship poorly or very poorly. Just 6% said the EU prioritises it very well. Over half (52%) of founders also said regulatory differences between EU countries have hindered their ability to scale across borders, up from 47.5% last year.

Energy at the center

Energy is where the tension between optimism and caution remains sharpest. Investors now see access to cheap and reliable power as a precondition for European companies to compete long-term. 84% said they consider a company's access to affordable, clean energy when assessing its long-term competitiveness, with almost six in ten calling it very important. Europe is now home to some of the most promising companies building clean power, while remaining an expensive place to buy it.

Investors' money is following that conviction. Nearly 37% of investors surveyed named energy and electrification as their top sector for impact capital allocation, more than three times next closest sector. The Norrsken/100 2026 — the annual list of the world's most promising impact companies, as selected by 80 top early-stage investment funds — published on October 16, saw clean energy and electrification startups make up the single largest sector with 26 companies, a figure up 44% on 2025.

Companies appearing on the Norrsken/100 include those working on overhauling and strengthening grid capacity and transforming renewables storage. Swiss company Metafuels is working to convert clean electricity into jet fuel, while RIFT and Enerin, based in the Netherlands and Norway respectively, are delivering high-temperature industrial heat from electrons instead of gas. These companies are opening up the markets that stand between Europe and an electrified economy. They are also exactly the kind of capital-intensive businesses that will go where power is cheap, permits are quick and markets are open.

The International Energy Agency (IEA) projects $2.2 trillion will flow into clean energy and electrification this year, against $1.2 trillion into fossil fuels — meaning that for every dollar going into oil, gas and coal, close to two now go into clean power. As Fabian Erici, Partner at Norrsken VC, put it: "Europe's hardest problems are becoming its biggest markets."

The policy asks

In responding to the EII, both founders and investors were clear that, in order to seize this momentum and their renewed commitment to decarbonisation, policymakers must now give investors and founders a better framework in which to grow and become global category leaders. Their top ask is to make the EU a genuinely single market, named by 45% of founders and almost six in ten investors as the key priority for European policymakers. Companies delivering Europe's electro-economy need easier access to Europe's 450 million-strong market, and regulatory differences between EU countries continue to make it harder to scale.

Brussels appears to be getting the message. During her State of the Union address on September 16, European Commission President Ursula von der Leyen committed to overhauling single market rules by the end of next year and advancing EU Inc — a proposed pan-European legal form for startups — to streamline cross-border expansion. Alongside the Capital Markets Union and the Savings and Investments Union — EU efforts to deepen Europe's capital markets and channel household savings into investment — and reforms such as EuVECA, the regime that lets venture capital funds raise across EU borders, the Commission's focus on grid connections, energy costs and permitting backlogs points in the right direction, according to the survey's authors.

None of these commitments are new, however, and founders have heard versions of them before. The rising share reporting fragmentation as a barrier suggests the gap between announcement and delivery is now what they are measuring their decision to stay by.

The same applies to electrification. Norrsken has called for Europe to become the world's first "electro-continent," underpinned by a binding target of 50% clean electrification. The Commission's proposed 46% target falls short of that ambition — and of its own analysis, which identifies 50% as the economically optimal pathway to 2040. A strong target in the post-2030 Energy Union Package, backed by a strong review of the EU Emissions Trading System (ETS) and national implementation measures, would give investors the certainty they are asking for, the organization argues.

Conditional optimism

The founders who said they had considered leaving Europe are still building there, still hiring and still expecting to grow. The survey's authors describe the prevailing mood as a conditional Europtimism: it rests on founders and investors believing Europe will follow through, and the clearest measure of that belief will be whether fewer of them are thinking about the exit when the index is run again next year.

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