Key European FinTech seed investment stats in H1 2023:
• European FinTech seed deal activity is on track to reach 714 deals in 2023, a 5.1% increase YoY
• European FinTech seed deal activity reached 184 transactions in Q2 2023, a 6.3% rise from Q1 2023
• UK companies raised the highest number of seed deals in Europe during the first six months of 2023
The European FinTech seed investment market is set to make a comeback this year. In the first half of 2023, there were 357 seed deals, and based on this, the projected total for 2023 is 714 transations, showing a 5.1% year-on-year growth. Notably, the second quarter of 2023 saw a surge in European FinTech seed deals with 184, a 6.3% increase compared to the previous quarter (Q1 2023). However, it’s important to keep in mind that despite this recent uptick, European FinTech deal activity in the first half of 2023 was down by a substantial 45% compared to the previous year. This indicates that while European FinTech remains innovative, later-stage funding rounds are experiencing a decline.
Carbonplace, a global carbon credit transaction network, had the largest European FinTech seed deal in H1 2023, raising $45m from nine investors. The company plans to utilise the funds to increase the size of its platform and team, broaden its range of services to reach a more extensive customer base of financial institutions, and hasten collaborations with more carbon market participants across the globe, such as registries and marketplaces. Carbonplace aims to facilitate the trade of certified carbon credits by connecting buyers and sellers through their banks. The platform, which is set to be launched later this year, will enable immediate transfer of ownership upon payment, ensuring secure and traceable reporting throughout the carbon credit transfer process. This system will be available to financial institution clients who wish to provide their customers with a secure and transparent way to access carbon markets.
The UK was the most active country for FinTech seed deals in Europe with 133 transactions, a 31.6% share of total deals. Germany was second with 48 funding rounds, a 13.4% share and France was third with 32 deals.
In June 2023, the European Commission proposed new regulations to modernize digital payments and the broader financial sector. These regulations aim to enhance consumer protection, competition, and data sharing security. They prioritize consumers’ interests and trust. The EU’s electronic payment market has grown from €184.2 trillion in 2017 to €240 trillion in 2021, driven by digital technologies and the COVID-19 pandemic. These reforms are intended to adapt the EU’s financial sector to the ongoing digital transformation, considering both opportunities and risks, especially from a consumer perspective.