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European Fintech Funding Takes a Hit in Q4 2020

European Fintech Funding Drops to $445.13 Million USD (€367 Million) in October 2020, Nearly Half the 2020 Monthly Average

After registering significant growth through the pandemic crisis, the Fintech market in the European region has suffered a setback in Q4 2020. The amount of VC funding flowing into Europe’s fintech sector seems set to reduce significantly in Q4 2020. VC investments into the European fintech sector totaled $445.13 Million USD (€367 million) across 44 deals in October 2020.

According to the research data analyzed and published by Comprar Acciones, it was one of the lowest monthly figures in 2020 seeing as the monthly average since January 2020 was $797 Million USD or €657 million.

Globally, fintech startups raised a cumulative $3 billion across 208 deals in October according to GoMedici. Compared to September 2020, there was a 54.4% month-over-month (MoM) decline in value and a 19.6% drop in transaction volume.

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Top 5 Fintech Deals in 2020

Between January and December 2020, there were only three deals that fetched $500 million or more in VC funding.

These were attributed to:

  • Klarna ($650 Million USD)
  • N26 ($570 Million USD)
  • Revolut ($550 Million USD)

Despite the pandemic crisis, the USD Fintech market remained bullish and managed to grab a lion’s share in VC funding rounds (close to 70 percent of the global funding percentage)

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European Fintech Trends

In 2019, the European fintech market saw 45 VC deals as of October. These fetched 1335 Million USD. This year, there was almost the same number of investment deals (44), but a much lean investment value (445.13 Million USD).

US Accounted for 60% of Global Fintech Funding Value in October 2020

In September 2020, European fintech companies received $1.7 billion in funding, while in October 2019, the figure was €1.1 billion.

A key reason for the October 2020 slump was the fact that there were no deals worth more than €50 million in that month. The highest value deal was Primary Bid’s Series B funding round worth £38.5 million. However, the number of deals was at par with the 45 deals posted in October 2019.

In Q2 2020, Europe received a total of $ 1.33 Billion USD (€1.7 billion) in funding while in Q3 2020, the figure increased to $3.15 Billion (€2.6 billion). That was a significant drop from the $6.8 Billion USD (€5.6 billion ) reported in H1 2019 according to McKinsey.

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Moreover, the highest VC deal in the first 10 months of 2020 was Klarna’s $650 million. N26 had the second-highest at $570 million while Revolut had $550 million, taking third place.

Globally, the US took the lead in October 2020 with a 59.8% share of global funding value in the fintech sector. According to S&P global, US-based startups raised 30.2% more in H1 2020 than they did in H1 2019. On the other hand, Asia Pacific raised a cumulative $3.9 billion in the first nine months of 2020, marking a 46% decline year-over-year (YoY).

Source: Comprar Acciones

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