Funding for fintechs in Europe hits €352 million in September

European funding is increasing

2019 has been a strong year for European fintech, with everything from investment rounds to mammoth acquisitions. A recent analysis of the first half of this year from KPMG showed consistently high deal flow in payments, regtech, wealthtech and cybersecurity – all of which are fintech sub-sectors positioned for continued growth. In September alone, fintech companies pulled in a combined €352 million, according to Finch Capital’s report with Dealroom.

Seemingly there’s no evidence of fintech deal flow slowing down in October and beyond either. London-based Rapyd started this month by raising $100m to boost its B2B cross-border payments business while Spanish banking app BNext secured a €22m investment, as highlighted in BlackFin Tech’s weekly reports of the European fintech space.

The data shows that fintech companies across the continent are receiving funding not just in traditional fintech hubs like Paris, London or Berlin. Deal flow has been picked up in Denmark, Finland and Lithuania too while Spain has been involved in  more, and larger, funding stories in recent months. In fact, seven of the 15 deals closed in the third week of September came from Spanish companies, according to BlackFin Tech, with the likes of cashflow software service Quipu raising €2m.

Securing funding is often at the top of the agenda for founders, particularly as many fintech companies are often not profit-making in the early stages of growth. However, this is just one part of the puzzle – building market presence, R&D, and sales and marketing can be just as instrumental in accelerating growth. Many global banks like BBVA offer opportunities for collaboration to support the growth journey such as Open Talent – the world’s largest fintech competition that provides a platform for finalists and winners to achieve recognition in the market. This year, there were 770 applications to BBVA Open Talent from 95 countries.

Spanish fintechs are securing higher amounts of investment

This year, Open Talent saw 65 applications from Spain alone, indicative of the continued strength of innovation in financial services in the country. This is reflected in the figures from BlackFin Tech showing Spanish fintech startups secured €9.4 million of the total funding in Europe over September. Traditionally Spanish fintechs have received smaller investment amounts, which may change in the future as the recent BNext round represents the largest Spanish fintech funding ever, potentially paving the way for a funding increase into the country.

Cobee – the employee benefits platform that wants to become “the next Spanish unicorn” – was named Open Talent 2019 winner for Spain and more recently named the global winner of the competition – a double win for the company. Cobee’s success is testament to the increase in quality and quantity of Spanish applicants.

2019 and beyond

London-headquartered digital bank Revolut has announced that it’s looking to raise a further $1.5 billion in the coming months. Ambitious drives like this make it clear why fintech is Europe’s largest investment area, as reported by Finch Capital, accounting for 20% of founding rounds on the continent. Indeed, Europe’s level of fintech investment is sat directly between Asia, which it overtook in the first half of 2019, and the US at $5.1bn, $2.2bn and $7.5bn respectively. Looking to 2020, it’s clearly a very exciting time for European fintech investors and innovators alike and this seems set to continue.