The European fintech industry endured tough conditions in 2023.
After years of being the region’s most sought-after sector, investment in fintech has fallen significantly.
Fintech accounted for 17% ($13.9 billion) of the $82 billion invested in European startups in 2022, according to Atomico. Last year, around $4.5 billion was invested, and this figure has decreased. This represents one-tenth of the total $45 billion poured into the ecosystem.
The same phenomenon can be seen on a global scale. Global venture investment in fintech has fallen to $43 billion, the lowest level in six years, according to Crunchbase.
But while the existential crisis may not be over at the macro level, the broader industry demise may be greatly exaggerated. After record amounts were invested in 2021, the drop in investment is causing a change in attitude within the industry.
Companies with weak business models are exiting and more solid B2B businesses are entering.
While many B2C fintech startups continue to be successful, VC investors are no longer willing to maintain high customer acquisition costs (CAC) and are instead looking to build sustainable businesses in the growing repeat spend market. That model is changing because we’re asking for it.
B2B companies will be the biggest sources of funding in European fintech in 2023, as investors look to back companies with a path to profitability.
Business Insider’s 2024 Fintech to Watch list includes startups from multiple European countries across multiple industry sectors. Open finance, B2B payments and financial infrastructure businesses dominate this year’s list.
Here, in no particular order, are 31 European fintech startups to watch this year.
