European fintech investments strengthen

Rising fintech investments in the UK and German markets are in stark contrast to fundraising and deal activity in China which, although soaring a year earlier, ground to a near halt in H1. 

According to Accenture the total value of fintech deals globally in the six months ended June 30th was $22bn, compared to $31.2bn in the same period of 2018, a decline of 29%. 

The drop was due mainly to the lack of a mega deal like Ant Financial’s record $14bn fundraising in May 2018. 

Discounting that transaction, global fintech investments would have climbed 28% in the first half of 2019 over the same period last year.

The value of deals in the US in the first half of 2019 jumped 60% to $12.7bn, even though the number of transactions was virtually unchanged from the first half of 2018 (564 versus563), signalling a trend of larger deals in the world’s biggest and most active fintech market. 

Fintech investment in the UK nearly doubled to approximately $2.6bn and the number of deals jumped 25% to 263, as challenger banks and payments companies continued to draw investors’ interest. 

“There’s been a lot of interest and demand from consumers for new fintech propositions, particularly in the UK and elsewhere in Europe, which helps explain the big jump in investments there,” said Julian Skan, Senior Managing Director in Accenture’s Financial Services practice. 

“Fundraising is also moving to support the scaling up of challenger and collaborative fintech, which will cause lumpiness in some rounds as we get to the business end of the investment cycle where investors look for returns based on a sustainable bottom line, rather than another buyer. 

"However, the question is – how long can that last? Fundraising is likely to reach a plateau soon and will most likely dip going forward.”

Other European markets also made big strides with investments in German fintechs more than doubling in the first half of 2019 to $829m from $406m in the same period last year. 

Fundraising in Sweden more than quadrupled to $573m while fintechs in France raised $423m in the first half of 2019, 48% more than a year earlier.

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