No let up for European fintech in 2020
Fintech was among the first European tech sub-sectors to garner the attention and envy of the world, but how is it faring in 2020. We’ve joined forces with BCG/Expand Research FinTech Control Tower to apply their taxonomy to Dealroom’s exhaustive data set to analyse the European Fintech Ecosystem navigating Covid-19.
Fintech attracts the largest share of equity investment in Europe, receiving more than €30B in venture capital investment since 2014.
In the unique first half of 2020, investment was below 2019 levels, but still higher than 2018 in almost all major European hubs. London dominates investments into European fintechs, claiming 57% of capital invested in H1 2020.
On whether VCs were still “open for business” in H1, Finch Capital Partner Aman Ghei told us: “Particularly at the beginning of the quarter, we saw venture funds shift focus from ‘new’ deals towards deploying capital in the existing portfolio.”
Series A/B rounds did indeed rise in Q2 as investors focused on their existing portfolios, whilst seed investments dropped and later stage VC remained steady.
Talis Captial’s Matus Maar highlighting the changeability of the time leading to a search of agility and resilience in new prospects: “Any new investments we considered in this time were companies that could demonstrate how they had quickly adapted – and could take advantage of – the new market conditions.”
Covid-19 has impacted every industry, but for startups developing technology and support solutions for financial institutions, corporates and SMEs, adoption and investment has accelerated.
It’s worth remembering that a generation of world-leading European fintech scaleups were born during the last financial crisis. The agile business models of fintechs and startups in general allow for innovation and adaptability to changing demands, enabling them to take advantage of new opportunities at speed and scale.