Key European FinTech investment stats in Q1 2025:
- European FinTech deal activity dropped by 62% YoY in Q1
- UK firms attracted over a third of the deals to cement the country’s position as the leading European FinTech hub for the quarter
- Solaris, a German Banking-as-a-Service (BaaS) provider enabling companies to integrate digital banking, payments, lending, and compliance solutions without holding a banking licence, secured one of the largest European FinTech deals of the quarter with a $145m Series G funding round
European FinTech deal activity dropped by 62% YoY in Q1
In Q1 2025, the European FinTech market continued to exhibit volatility, with funding and deal activity reflecting a mixed recovery.
Total funding reached $5.4bn, marking an 84% increase from the $3bn recorded in Q4 2024.
However, this still represented a 25% decline from the $7.3bn raised in Q1 2024.
Deal volume followed a different trend, falling slightly to 254 deals in Q1 2025, down 5% from 267 in Q4 2024 and 62% lower than the 675 deals completed in Q1 2024.
While the rebound in funding suggests a return of some investor confidence, the continuing decline in deal activity indicates that overall appetite remains muted.
UK firms attracted over a third of the deals to cement the country’s position as the leading European FinTech hub for the quarter
The United Kingdom retained its leading position in the European FinTech space, recording 88 deals in Q1 2025 (35% share), though this marked a 57% drop from the 203 deals completed in Q1 2024.
Germany secured second place with 26 deals (10% share), down 68% from 82 deals the previous year.
France followed with 24 deals (9% share), a 65% decline from its 68 deals in Q1 2024.
Despite these notable reductions in absolute deal numbers, all three countries saw a rise in their respective shares of total deal activity, highlighting their continued dominance in the region even as the broader market contracts.
Solaris, a German Banking-as-a-Service (BaaS) provider enabling companies to integrate digital banking, payments, lending, and compliance solutions without holding a banking licence, secured one of the largest European FinTech deals of the quarter with a $145m Series G funding round
The investment, led by Japan’s SBI Group alongside existing client Boerse Stuttgart Group and several other strategic partners, also marks a significant shift in Solaris’ ownership, with SBI acquiring a majority stake.
The capital injection comes amid ongoing restructuring efforts, including a reduction of Solaris’ workforce by one-third and the divestment of its UK-based Engage business.
The funding will support the Berlin-based firm’s path to profitability, bolster its core capital base, and accelerate market expansion opportunities.
Following a $100m financial guarantee in 2023 to back a major contract with ADAC and a prior $100m raise in its Series F, this latest round brings renewed momentum as Solaris continues to evolve from its $1.6bn valuation in 2021 into a more resilient, growth-oriented BaaS leader.
Keep up with all the latest FinTech research here
Copyright © 2025 FinTech Global
