14 Nov FinTech is Growing Rapidly in Europe
Investments in the global FinTech sector have grown more than four times faster than venture capital investments. Worldwide financing activity in terms of investments in FinTech companies has more than tripled over the course of the last five years and has exceeded the 3 billion USD mark. The vast majority of investments are taking place in the United States: one third of the global fintech financing and 20 percent of all deals took place in Silicon Valley in 2013. Meanwhile, 13 percent of financing and 15 percent of deals were completed in Europe.
Nevertheless, the five-year growth rate in FinTech investments in Europe vastly exceeds the growth rate of both Silicon Valley and the global average. The five year compound annual growth rate for Europe excluding the UK and Ireland is expected to amount to 56% for deal volume and 39% for investments, while the global average five-year compound annual growth rate is expected to amount to 27% for deal volume and 26% for investments.
Germany is one of the top five European regions for fintech startups when measured in terms of total deal volume. Currently, more than 130 active players comprise the German FinTech market. The majority of these players focus on the investment, payment or banking market segments. André M. Bajorat, Co-Founder at figo, former CEO at NumberFour AG, and specialist in banking, payments, and mobile technologies, has categorized German FinTech startups as follows:
As customers’ lives are becoming increasingly mobile and digital, they are changing their behaviour and expectations with respect to financial information and products. New access to information and to banking products will continue driving demand for fintech products, meaning that investors can expect strong growth in the fintech sector in Europe and abroad.
Players worth watching in Europe include Powa Technologies, Funding Circle, iZettle, SumUp, Fenergo, WorldRemit, iZettle, Payleven, Kreditech, wonga, fidor bank, Zopa, iwoca, Transferwise, klarna, paymill and Auxmoney.
Sources: Accenture Report “The Boom in Global FinTech Investment” (published 2014) and André M. Bajorat “Deutsche Fintech Startups Mindmap” (published 19.11.2013)