Much has been made of the boom in Europe’s financial technology sector in 2014. And, as our analysis of the publicly disclosed deals and investors in the fintech sector shows (see table), not all of it is hype.
Europe, and in particular the UK’s ability to attract investment in start-up financial technology firms is a bright star in the region’s otherwise gloomy economy. Even more reassuringly, with some of the region’s largest banks behind the funds investing in early-stage firms there are certain to be some success stories that will go on to become global leaders.
So far to date however, few European firms have managed to move beyond the start-up investment phase to successive funding rounds to help them grow to become world leaders. As an indication, in the UK only one fintech start-up company, Monitise, has moved from being a privately held business to listing on the London Stock Exchange – and many would agree that it has been far from successful.
Data collected in 2013 by VentureSource, a research group, revealed that European tech firms raise an average of just $8 million in third round funding – usually needed to fund expansion – compared to an average of $15 million for equivalent firms in the US. If the region is to create a new generation of technology-focussed multinationals, Europe’s fast-growing fintech stars will need to keep up the commercial, competitive and communications pressure on their customers, and their investors, to succeed.
Fintech deal watch
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