{"id":612463,"date":"2020-09-22T07:15:10","date_gmt":"2020-09-22T06:15:10","guid":{"rendered":"https:\/\/www.maddyness.com\/uk\/?p=612463"},"modified":"2021-11-02T11:03:14","modified_gmt":"2021-11-02T11:03:14","slug":"european-fintech-6-months-on-stable-today-but-prepare-for-2021-fall-out","status":"publish","type":"post","link":"https:\/\/www.maddyness.com\/uk\/2020\/09\/22\/european-fintech-6-months-on-stable-today-but-prepare-for-2021-fall-out\/","title":{"rendered":"European fintech six months on: stable today but prepare for 2021 fall out"},"content":{"rendered":"
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\"Although the 2020 situation looks good at first glance, European Governments have provided a huge amount of support for fintech startups. This support offset the decline in institutional funding but this was a one off initiative. In the next six to 12 months, startups and scale-ups will face a harsher market test for raising additional funding due as the government funding slows and VCs funds get maxed out, focusing remaining fund capacity on their winners\" - Radboud Vlaar, Managing Partner at Finch Capital.<\/p>\n

Key findings:<\/p>\n

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  • \u25cf \u00a0Overall, fintech is a resilient European Tech growth engine for now\u200b. E\u200b uropeanfintech funding by VCs and PE firms in H1 2020 is reported to be down by around 10%, but when corrected for Government funding it is up 20%. This is because the funding databases only record publicly announced equity rounds, while most government funding went in as a convertible debt note and so was not disclosed.<\/li>\n
  • \u25cf \u00a0Impact of the lockdown on the fintech sectors was in line with our predictions, except for Payments and Mortgages\u200b that both went up, contrary to what we predicted. For payments, travel rebounded faster than expected and ecommerce skyrocketed 210% as brick and mortar shops closed and people were stuck at home. Challenger banks (less travel and FX) and Commercial Real Estate (drop in use of offices, shops etc). Trading firms benefited from the volatility, and InsurTech and Enabling fintech (such as AI) performed as expected with continued strong demand for digital solutions.<\/li>\n
  • \u25cf \u00a0Analysis of the top 50 European fintech hiring and firing, showed startups took this chance to reevaluate cost inefficiencies\u200b. Coupled with government support<\/li>\n<\/ul>\n<\/div>\n<\/div>\n

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    programs, they reduced headcount on sales teams given limited in person sales<\/p>\n

    meetings and increased customer support and lived to fight another day.<\/p>\n

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    • \u25cf \u00a0We expect the next 12 months to be dynamic as fundraising becomes moreselective and drops in Q4 and 2021\u200b which will be a harsh reality for the many shakeout and down round candidates whose runway got extended into 2021.<\/li>\n
    • \u25cf \u00a0European fintech M&A Momentum hindered by lack of big bold buyers andfragmentation: \u200bDespite the M&A boom in the US, Europe lacks big ticket M&A buyers for fintechs, and challenger banks in particular. As illustrated in our 2019 edition,\u200b \u200bwe have seen no venture backed exits for fintechs greater than EUR 0.5B in Europe in the last year. For scale-ups below EUR 0.5B, we expect to see massive consolidation by fintechs (e.g. Like the recent acquisition of Vouch by Goodlord) and corporates with a strong focus on profitability to meet the needs of Private Equity firms as potential buyers.<\/li>\n
    • \u25cf \u00a0Big trends that will shape 2021: \u200bFrom cracking the exit path of the challenger banks to the rise of global privacy and consolidation of fragmented players there will be a lot of opportunity in the sector with a new focus on profitability.Vlaar continues: \u201cA shakeout of the European fintech is not necessarily bad. In the last five years Europe has seen 100,000s of new companies raise massive amounts of capital, build and start selling new products to meet a market need. Sometimes hundreds of companies are trying to solve a similar problem in different countries. This creates an opportunity for investors to invest in consolidation winners at attractive prices and make profitable companies, so that these companies can become acquisition targets for Private Equity firms\u201dAbout Finch CapitalFinch Capital is a thematic investor in software transforming the Financial Sector (incl. AI and IoT) and has a track-record since 2014 of backing future champions in Europe and SouthEast Asia. Companies include Aylien, BUX, Brickblock, Brytlyt, Fixico, Fouthline, Goodlord, Grab, Hiber, Safened, Twisto and Trussle. Finch Capital consists of a team of 12 investment professionals with wide entrepreneurial experience (e.g. Adyen and Arista), prior investment experience (e.g. Accel, Atomico, Khazannah) and industry backgrounds (e.g. Facebook, Google and McKinsey), located across offices in Amsterdam, London and Jakarta. For more information see \u200bwww.finchcapital.com.<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

      \"Although the 2020 situation looks good at first glance, European Governments have provided a huge amount of support for fintech startups. This support offset the decline in institutional funding but this was a one off initiative. In the next six to 12 months, startups and scale-ups will face a harsher market test for raising additional […]<\/p>\n","protected":false},"author":121,"featured_media":612476,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"footnotes":""},"categories":[34359],"tags":[],"hashtag":[33432],"type-d-article":[23048],"maddybasic_maturity":[],"maddybasic_thematic":[],"partnership":[],"poool":[],"class_list":["post-612463","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-portfolio","hashtag-fintech","secteur-fintech","type-d-article-classique"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.maddyness.com\/uk\/wp-json\/wp\/v2\/posts\/612463"}],"collection":[{"href":"https:\/\/www.maddyness.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.maddyness.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.maddyness.com\/uk\/wp-json\/wp\/v2\/users\/121"}],"replies":[{"embeddable":true,"href":"https:\/\/www.maddyness.com\/uk\/wp-json\/wp\/v2\/comments?post=612463"}],"version-history":[{"count":8,"href":"https:\/\/www.maddyness.com\/uk\/wp-json\/wp\/v2\/posts\/612463\/revisions"}],"predecessor-version":[{"id":695688,"href":"https:\/\/www.maddyness.com\/uk\/wp-json\/wp\/v2\/posts\/612463\/revisions\/695688"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.maddyness.com\/uk\/wp-json\/wp\/v2\/media\/612476"}],"wp:attachment":[{"href":"https:\/\/www.maddyness.com\/uk\/wp-json\/wp\/v2\/media?parent=612463"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.maddyness.com\/uk\/wp-json\/wp\/v2\/categories?post=612463"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.maddyness.com\/uk\/wp-json\/wp\/v2\/tags?post=612463"},{"taxonomy":"hashtag","embeddable":true,"href":"https:\/\/www.maddyness.com\/uk\/wp-json\/wp\/v2\/hashtag?post=612463"},{"taxonomy":"type-d-article","embeddable":true,"href":"https:\/\/www.maddyness.com\/uk\/wp-json\/wp\/v2\/type-d-article?post=612463"},{"taxonomy":"maddybasic_maturity","embeddable":true,"href":"https:\/\/www.maddyness.com\/uk\/wp-json\/wp\/v2\/maddybasic_maturity?post=612463"},{"taxonomy":"maddybasic_thematic","embeddable":true,"href":"https:\/\/www.maddyness.com\/uk\/wp-json\/wp\/v2\/maddybasic_thematic?post=612463"},{"taxonomy":"partnership","embeddable":true,"href":"https:\/\/www.maddyness.com\/uk\/wp-json\/wp\/v2\/partnership?post=612463"},{"taxonomy":"poool","embeddable":true,"href":"https:\/\/www.maddyness.com\/uk\/wp-json\/wp\/v2\/poool?post=612463"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}