European Embedded FinTech solutions see drawback from VCs in Q1 2023

Key European Embedded FinTech investment stats in Q1 2023:

• European Embedded FinTech deal activity reached 46 deals in Q1 2023, a 62% drop YoY

• European Embedded FinTech investment reached $190m in Q1 2023, down 93% from Q1 last year

• The UK was the most active Embedded FinTech country with 14 deals, a 30% share of total deals

Embedded FinTech solutions saw a correction in Q1 2023 with a significant drop in both deal activity and investment. In the first quarter of 2023, the number of European Embedded FinTech deals declined by 62% compared to the previous year, totalling 46 deals. In Q1 2023, European Embedded FinTech investment plummeted by 93% compared to the same period in 2022, reaching a total of $190m. Large deals from the likes of Checkout.com ($1bn) and Viva Wallet ($800m) have slightly distorted the significant drop in investment.

APEXX, a payment gateway, was the largest Embedded FinTech deal in Europe during Q1 2023, raising $25m in their latest Series B funding round, led by Alliance, Forward Partners and MMC Ventures. Through APEXX Connect, which was “launched since the Series A round, merchants can also access over 12 solution providers throughout the BNPL ecosystem through one API.” APEXX will “use the new capital to expand into North America via its New York office. APEXX will also invest in its capabilities across the global payments ecosystem and reinforce its leading position as a payment orchestration platform and BNPL aggregator.” This will “allow the company to introduce more payment methods to businesses globally.”

The UK was the most active Embedded FinTech country in Q1 2023 with 14 deals, a 30% share of total deals. Germany was the second most active country with five deals. Sweden and Spain were the joint third most active countries with three deals each.