Fintech in Europe

• Europe's IT Market
• Fintech Market (FinTech)

2023: 3-fold decrease in investment in fintech companies - up to 4.6 billion euros

According to the results of the first six months of 2023, European fintech companies attracted €4.6 billion in investments, which is approximately three times less than the amount recorded in the first half of 2022 - about €15.3 billion. Such data are provided in a study by Finch Capital, the results of which were released on September 12, 2023.

Thus, investments in fintech companies in Europe on an annualized basis collapsed by about 70%. During January-June 2023, 463 transactions were registered to provide funds to fintech companies. For comparison: a year earlier, the number of such agreements reached 884. A 48% reduction was recorded.

In 2021 and 2022, the 20 largest rounds of financing in Europe accounted for 50% of the corresponding market. In the first half of 2023, the value exceeded 60%, but at the same time the size of transactions decreased significantly. The so-called seed rounds continue to attract funding, while companies in the Series A-C stages have seen the biggest cuts in investment.

Activity in the field of mergers and acquisitions compared to the first half of 2022 decreased by only 5%, which indicates the desire of market participants to conclude transactions with an attractive value. At the same time, in monetary terms, the total volume of such agreements decreased on an annualized basis by 84%.

The study says that during the year (by the end of June 2023), European fintech companies, in an effort to maintain profits, cut about 3,100 employees. On the other hand, the 10 fastest-growing organizations in the area under consideration employed more than 1,050 workers during the specified period.

Since mid-2022, we have seen an increase in investment discipline in the public and private markets, which leads to a reduction in funding, layoffs and fewer IPOs, "said Radboud Vlaar, managing partner at Finch Capital.[1]

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