Key European WealthTech investment stats in Q3 2023:
· The UK recorded the most WealthTech deals in Europe with 13 transactions in Q3 2023
· European WealthTech companies raised a combined $207m in Q3 2023, a 34% reduction from Q2 2023
· European WealthTech deal activity totalled at 30 deals in Q3 2023, a 41% drop from Q2 2023
European WealthTech has seen the third consecutive quarterly drop in both deal activity and investment in Q3 2023. In the third quarter of 2023, the number of WealthTech deals in Europe reached a total of 30, marking a significant 41% decrease compared to the second quarter of the year. During the third quarter of 2023, there were 30 WealthTech deals in Europe, indicating a substantial 41% decline when compared to the preceding second quarter of 2023.
Bunq, a Dutch neobank, had the largest European WealthTech deal in Q3 2023 after raising $111m (€100m) in their latest venture funding round, led by Pollen Street Capital. This latest funding puts Bunq at a €1.65bn valuation, exactly the same valuation the neobank had in 2021 when it raised $228m. This fresh capital allows the mobile bank to further accelerate its international expansion and continue its rapid growth. The company presently boasts nine million customers, a significant increase from 5.4 million just one year ago. Additionally, it has seen a substantial growth in customer deposits, currently holding €4.5bn, compared to €1bn two years ago. While most of its customers are located in Europe, the CEO, Niknam, believes that the U.S. presents an equally substantial opportunity. In April of this year, the company initiated the process of obtaining a banking license in the U.S. Its aim initially will be to target the various expats from Europe who have moved to the U.S. but still have roots in Europe. “I have experienced how complicated things are in the U.S.,” he said. “You can’t survive without a bank account, but getting one without a U.S. tax ID [or credit history there] can be mind-bogglingly difficult.” Similarly, he believes that offering services to U.S. residents who have moved abroad to Europe presents another opportunity that’s much easier than opening local bank accounts.
The UK was the most active European WealthTech country with 13 deals in Q3 2023, a 43% share of total deals. Switzerland and Estonia were the joint second most active European WealthTech countries in Q3 2023 with three deals each.