Why Europe’s Fintech Industry Is Vibrant


Fintech companies have been springing up across Europe over the past few years, and the space is becoming increasingly competitive as the industry continues to evolve and grow. But why does this region deserve so much attention? It’s due to three key factors that combine to give European fintech’s an edge over the U.S., making them one of the most vibrant fintech industries in the world today. Learn more about how the Fintech industry in Europe has come so far, and what makes it worth your while as an entrepreneur to start your own fintech company in Europe.

A Brief History of European Fintech

While many people associate fintech with Silicon Valley, there’s also a vibrant and growing fintech community in Europe. In fact, several European countries are now widely considered to be leading fintech hubs, with some cities seeing more deals than San Francisco. From Stockholm to London to Amsterdam and Paris, European entrepreneurs have set up hundreds of fintech companies over just a few years. Some of these start-ups have made successful exits as well—transfer service TransferWise sold for $1 billion in 2015 and consumer finance start-up Nutmeg raised $30 million in 2016. With so much going on, it’s clear that Europe is an exciting place for fintech innovation. But why is that? And what can we learn from European entrepreneurs? Let’s take a look at how things got started and where they might go next.

The Fintech Funding Ecosystem

Compared to other global regions, Europe’s fintech scene has been more reliant on venture capital funding to develop its companies. According to data from CB Insights, nearly 20 percent of all VC deals in 2015 and 2016 went toward fintech firms, with London being a hub for most of that activity. But start-ups are also able to raise relatively larger amounts through VC rounds; over half of all VC rounds in fintech last year exceeded $5 million and 10 percent reached $20 million or more. In contrast, U.S.-based fintech companies had median round sizes of roughly $4 million and saw only about 30 percent exceeding $5 million last year.

Still, it’s not just VC money fuelling growth in Europe—angel investors have played an important role as well. For example, Berlin-based crowdfunding platform Seedmatch raised €1.6 million ($1.8 million) from angel investors in 2013 before going on to secure €10 million ($11.3 million) in Series A funding led by Accel Partners two years later.

Prominent Innovators in the Market

Revolut, N26, Monese, Holvi and Monzo. These are just some of names that populate Fintech’s landscape and help it thrive within a global market worth an estimated $30 billion in 2016. Although these start-ups have many areas where they differ from one another, what binds them together is their focus on leveraging mobile platforms to disrupt financial services on both a national and international scale. They prioritize individual service as opposed to focusing solely on reducing costs. This approach reflects how they’re designed to function by fostering greater interaction between businesses and clients using big data analytics which in turn allows banks to gain new insights into consumer habits.

The UK has seen more than a few notable technology startups in recent years, most notably TransferWise and Monzo. Both of these companies are disruptors within their respective markets, boasting innovative services that focus on improving users’ overall financial wellness as opposed to simply making them aware of current trends.

Challenges That Face the European FinTech Ecosystem

Traditional finance is big, powerful and influential. Being regulated by bodies such as The Financial Conduct Authority in London makes it hard for companies to create their own regulations and it keeps them from changing at a faster pace. This is why regulation plays a large role in helping these start-ups grow. There are still many challenges that face Europe’s FinTech industry; problems that include security of user data, fraud prevention, and cross-border payments to name a few. Although there are threats to growth in some areas of FinTech, there are also opportunities presented by new technologies such as Artificial Intelligence (AI) and Blockchain tech.


The European fintech industry is vibrant and ripe with opportunity. The digital economy is booming, and fintech companies are already making an impact on every corner of financial services. The innovation generated by these up-and-coming companies, coupled with a new wave of VC funding, will continue to accelerate in 2016. This momentum bodes well for innovative solutions that can both support existing industries and revolutionize them—in turn, it will be interesting to see what happens next for Europe’s innovators!

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