Europe’s fintech startups have continued elevating huge quantities of capital over the lockdown interval, attracting round €3.3bn in funding between March and mid-August.
Regardless of a quick funding blip in March, the second quarter of 2020 noticed fintechs rake in $1.6bn; solely barely down on the €2bn raised within the first quarter.
Equally, the variety of fintech offers in Europe between April and June stood at 148 offers; solely a fraction down from the 169 throughout January and March.
It’s not but clear how badly fintechs’ valuations have been affected in current months, however in line with Pitchbook, traders in Europe appear assured that long-term macro traits (together with accelerated digital adoption) will “broadly favour” the sector.
Nonetheless, not all sub-sectors inside fintech have attracted the identical stage of enterprise backing.
The evaluation beneath breaks down the month-to-month funding knowledge by sub-sector, together with funds, banking, wealthtech, lending, and insurtech, to know how every space of fintech has carried out with traders in current months.
Insurtechs’ golden second?
One sub-sector worth maintaining a tally of is insurtech.
Regardless of not receiving a lot mainstream consideration, knowledge reveals that insurtechs made up almost 20% of all fintech rounds in Europe in Q1 2020 — not unhealthy for a nascent area.
Whereas that determine dropped to 14% in Q2, the insurtech market remains to be predicted to be worth over $1.6 trillion by 2024. In the meantime, high fintech fund Anthemis say they anticipate funding within the sector to choose up once more within the mid-term as insurtechs leverage their digital infrastructure and outpace older, analogue gamers.
Nonetheless, it’s worth remembering it would take time for insurtechs to make a severe dent available in the market, says Christian Wiens; chief government of client insurtech GetSafe
“The traditional big players will not go bankrupt overnight; and it will take time for insurtech to gain significant market share. The largest global insurance companies each have annual revenues well over $100bn, more than twice Facebook’s 2018 revenues, and it will be years before insurtechs are anywhere near that level,” Wiens instructed Sifted.
Funding winners and losers
It’s worth remembering the $3.3bn raised in current months has been closely concentrated in a collection of mega offers — together with N26’s $500m spherical in May.
Beneath is a abstract of the most important funding rounds that befell within the midst of the pandemic.
Total, that signifies that late-stage firms secured over 75% of the capital raised since lockdown started.
In the meantime, the variety of early-stage and angel stage offers has been bumpy since February. That could possibly be a warning signal that a number of smaller fintechs are on the cusp of operating out of cash, regardless of some help from authorities schemes just like the UK’s, which has backed no less than a dozen finance-focused startups.