In just the first two months of 2021, Europe’s Fintech’s have remarkably been able to rake in US$2.9 billion in fundraising according to data released by market intelligence startup CB Insights. This massive surge in investment funds was not isolated in just Europe, Asia and North America took part in the cash splurge led by an increase in what the industry calls mega rounds, which means investments of US$100 million or more.
The data was released the final day of February 2021, showing record amount of funds being raised from these mega rounds as well as the number of mega rounds held. To give you a picture of just how massive these fundraising events were only 8% of total deals made in January and February were mega rounds but accounted for 71% of all funds raised.
The charts below show Global Fintech Funding by continent and Fintech Mega Round count by region, so you may visualize just how remarkable the increase has been since 2018.
Global fintech funding ($M) by continent, Q2’18 – Q1’21 (as of 2/28/21), State of Fintech Q1’21 Preview, CB Insights
Fintech mega-round deal count by selected regions, Q2’18 – Q1’21 (as of 2/28/21), State of Fintech Q1’21 Preview, CB Insights
Checkout.com started the year off strong for Europe with a US$450 million fundraising round that now triples the value of the company to US$15 billion. This fintech company is based in London and focuses on processing payments for some of the most well-known Unicorns, a fintech business that is valued over US$1 billion, like Grab, Klarna and Farfetch. Another U.K. based payment provider PPRO also hit Unicorn status the same month by raising US$180 million, only to extend the round to cash in another US$90 million!
Germany’s banking software agency Mambu had a fantastic round in January as well, raising US$130 million! The mega round left Mambu with a pretty valuation of over US$2 billion. Just a little way away Luxembourg based Blockchain.com, executing on the rising fascination of cryptocurrency products like wallets, block exchanges, and block exploring, has added US$420 million in cash over two rounds since the start of 2021.
In February, Cryto startup BitPanda, UK Digital Bank Starling, and Insurtech Zego participated in mega rounds to join the Unicorn status club. Europe now houses 20 fintech Unicorns, with the UK out ahead of the pack with 13 and followed, not so closely, by Germany with four.
The firm who conducted the research, noted that embed finance and digital currencies are and will continue to gain traction in the coming years. This is important because as more and more central banks are beginning to test digital currencies, the private sector that dapples in this space will gain more credibility and in sequence more customers.
Also embedded finance, which is a concept where non-financial companies integrate financial products into their service offerings, is a sector that is gaining traction fast. Specifically, everyday consumer lending companies that offer buy now pay later options are ones to keep an eye on. A final note the researchers offered was that in 2021 we could see a consolidation among Europe’s Fintech firms which could ultimately bring together the strongest competitors as traditional companies try to play catch up in the digital transformation space.
Fintechnews Switzerland. “Fintech Funding in Europe Reaches Highest Quarterly High Since Q2’18.” Fintech Schweiz Digital Finance News – FintechNewsCH, 8 Apr. 2021, fintechnews.ch/funding/fintech-funding-in-europe-reaches-highest-quarterly-high-since-q218/43944.