FinTech investment in Europe has a strong start to the year

Total value invested in Europe has already reached 48.1% of 2018’s level in the first quarter of this year

  • FinTech companies in Europe have raised $3.0bn across 104 deals so far this year.  FinTech investment in Europe dropped 22.3% from 2017 to 2018, however this year has started off strong and could be on track to surpass the total capital raised in 2017.
  • There have been eight transactions valued at $100m and over so far this year, compared with just four in the first three months of 2018. These eight deals make up over half of the total capital raised in Q1 2019.
  • The largest deal so far this year is OakNorth’s $440m funding round. The London-based neobank offers loans for business and property developers in the UK, and licenses its platform to various financial institutions.  Singapore-based conglomerate Clermont Group and Tokyo-based SoftBank Vision fund both participated in the round. OakNorth has raised over $1bn since it was founded in 2015 and this latest funding round values the company at $2.8bn.
  • The number of deals in the first three months of this year, 104, constitutes 21.2% of 2018’s total deal activity.

Investment in Q1 2019 hit a five-quarter high

  • Total value raised by Europe-based FinTech companies in the first three months of 2019 was at least 60% higher than any quarter in 2018. Additionally, value invested in Q1 has increased 89.3% compared with the first quarter of last year.
  • The second largest funding round in Q1 2019 was N26’s $300m Series D round.  This latest round, which valued the company at $2.7bn, was led by American venture capital and private equity firm Insight Venture Partners. GIC, a sovereign wealth fund established by the Government of Singapore and London-based investment firm Greyhound Capital also participated. The Berlin-based challenger bank plans to use the latest capital injection for its launch in the United States.
  • There was less deal activity in Q1 2019 than three of last year’s quarters. The increase in total amount invested and drop in deal activity is due to the maturing FinTech ecosystem in Europe, as certain FinTech companies begin to establish themselves and investors move towards fewer later stage deals.

The United Kingdom is by far the most active country for FinTech investment in Europe

  • Companies in the United Kingdom completed 1,277 FinTech transactions across the last five years. This figure is higher than the total number of deals raised in the other nine most active European countries.
  • Germany is the second most active European country for FinTech investment. Companies in this country have raised 308 deals since 2014. N26, the previously mentioned challenger bank, was the fifth most well-funded FinTech company in Europe over the last five years. Funding rounds raised by companies based in the United Kingdom and Germany make up over half of all funding rounds raised in Europe since 2014.
  • In the next most active countries for FinTech investment, Sweden, France, Switzerland and Spain, there have been over 100 deals each since 2014. The two largest deals in these four countries were raised by Klarna. The Stockholm-based challenger bank, which provides payment solutions for 60 million consumers across 100,000 merchants, has raised more than $500m across 14 funding rounds.

The top 10 investors in European FinTech companies have participated in 382 deals since 2014

  • Eight of the top ten investors in the European FinTech space have headquarters in London. Just one of these eight, Index Ventures, has a second headquarter in San Francisco. The venture capital firm has already participated in four deals this year. These include Netherlands-based GeoPhy’s $33m Series B round.  The company aims to transform antiquated commercial real estate (CRE) processes with data-driven valuations and analytics powered by machine learning.
  • Both the remaining top investors Speedinvest and Global Founders Capital are venture capital firms based in Vienna and Berlin, respectively. In February, Speedinvest invested €3m in Brussels-based Koalaboox. The software company offers a financing solution integrated into an easy online invoicing software. The startup plans to use the latest capital injection to expand its operations in Europe.  Additionally, a partner at Speedinvest, Guzel Gumerova will join Koalaboox’s board of directors.
  • Six of the top ten investors are venture capital firms (Index Ventures, Balderton Capital, Anthemis Group, Speedinvest, Passion Capital, Global Founders Capital) two are equity crowd-funding platforms (Seedrs, Crowdcube) and two are accelerators (Startupbootcamp, Seedcamp). T

The data for this research was taken from the FinTech Global database. More in-depth data and analytics on investments and companies across all FinTech sectors and regions around the world are available to subscribers of FinTech Global. ©2019 FinTech Global

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