Capital flowing into fintech is driving funding deals for European tech companies

By John Reynolds on 4th November 2019

Fintech

Report compiled by Stripe and Tech.eu notes the upwards trend is likely to continue.

Capital flowing into fintech is driving funding deals for European tech companies
Image source: Image provided by Pixabay.

A surge in €100m+ (£86m+) funding deals for European tech companies over the past 12 months has been driven by an increase in capital flowing into the European fintech industry, according to a new report.

The report has been compiled by Stripe and Tech.eu and scrutinises the state of late-stage technology funding in Europe.

The report highlights that 2019 has been a record year for late-stage investments in European tech companies, citing 52 deals of €100m (£86m) or more.

The surge has been driven by funding deals for the likes of Monzo, Transferwise in the UK and N26 in Germany, the report says.

It adds that, as well as fintech, software sectors in Europe are driving the late-stage financing surge.

The report notes that there have been nearly five times more late-stage funding rounds for European fintech companies between quarter one and quarter three in 2019 compared to all 2018.

The positive trend in funding rounds could well continue in 2019 after it was revealed Revolut was looking to raise $500m (£387m) in equity and a $1bn convertible loan, and Germany's Lilium reportedly being in talks with investors about raising between $400m (£309m) and $500m (£387m) in new funding.

The report notes there were 34 late-stage deals for European fintech scale-ups from 2015 to quarter there 2019, but two-thirds of them happened in the first three quarters of 2019.

The report also highlights that the European regulatory environment has helped investment in fintechs.

"The European Union has made great strides in trying to level the playing field between large financial organisations and start-ups/scale-ups, leading to a healthy and fast-growing industry across Europe," the report says.

Finally, the report paints an optimistic future for the European fintech industry.

“At the moment, Europe is undergoing seismic changes in the banking, finance, and insurance industries, partly because of the emergence of a group of innovators in the financial technology (Fintech) space."

“It’s companies in this field - such as Klarna, Transferwise, N26, Revolut and Monzo - that are the driving force behind the surge of late-stage funding for European tech companies, and are likely to continue to be so in the coming years.”

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