European fintech funding plummets

metaverse newA return to ‘investment discipline’ has seen the level of funding for European fintechs drop by 70% within the last year.

A report from UK-based investment firm Finch Capital shows that fintechs based in Europe raised €4.6 billion in the first half of 2023, compared to the €15.3 billion raised during the same period in 2022.

The number of deals also reduced by close to half during that period- from 884 to 463. And while there was only a slight decline in the number of M&A transactions (5%), the value of these transactions fell by 84%.

According to Finch Capital, the main reason for this reduction in funding is a renewed emphasis on investment discipline and profitability, which has also led to more lay-offs.

According to Radboud Vlaar, managing partner, Finch Capital, this trend will “continue to be painful for the next 12 months, but will result in a more healthy and sustainable start-up, hiring and investor ecosystem”.

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