The AltFi view on European fintech: Putting London on notice

Weekly Leading Article

For years naysayers across Europe have argued that London’s title as the fintech capital of Europe was time-limited.

Surely the rival financial centres of Berlin, Paris, Stockholm or even Lisbon all stand a chance at claiming that crown? Especially in the wake of the UK’s controversial decision to leave the European Union?

Now that debate will likely rumble on for years to come, but proponents of the EU have a host of new evidence to support their argument in recent weeks.

In Germany, we see the just-announced merger of Raisin and Deposit Solutions, the duo planning to create a European wealth champion in the form of Raisin DS, likely valued well in excess of €1.5bn.

Earlier this month in Germany, robo-investment platform Scalable Capital, which has routes in London, raised $180m in a round led by Chinese tech giant Tencent, pushing its valuation north of €1.1bn.

Meanwhile, in Amsterdam, Mollie shattered its own records last week with an $800m funding round with rapid international expansion in its sights, with a €5.4bn valuation to boot.

Neighbouring fintech Bunq is said to be keeping pace, having reportedly agreed to a €160m funding round earlier in the month at a €1.65bn valuation.

Then, of course, there was the bombshell announcement last week that Visa, having backed away from Plaid in the US, is now looking to grab Sweden’s open banking starTink at a €1.8bn purchase price.

Yes, London had its own fintech excitement last week with JP Morgan’s acquisition of Nutmeg in a deal said to be worth £700m, yet this deal seems somewhat small-scale given the action on the continent right now.

True, London—or the UK more broadly—has more fintech unicorns than the rest of Europe combined and is still far out in the lead when it comes to raising VC cash. 

Unlike the 2010s, however, the steady drumbeat of fintech progress is now happening well beyond the boundaries of the Square Mile.

London, you are on notice.

The AltFi Leader is a new weekly view for 2021 from our editorial team. We’d love to hear your ideas, thoughts, feedback and constructive criticism: editorial@altfi.com