Is Europe Still a Hub for Fintech Investment?

Increased digital adoption, growing consumer demand for sustainable, seamless financial services and regulatory shifts are transforming the European fintech landscape.

Not only are economic pressures forcing fintechs to scale efficiently but emerging technologies, greater competition from big tech banks and a focus on cybersecurity are also driving innovation.

According to data from Dealroom.co, a rise in European fintech investment by 10% in 2024 alludes to greater confidence in the leading tech sector of the continent. 

Mega-rounds from leading organisations such as Monzo (US$605m), WorldRemit (US$267m), Sequra (US$211m) and Alan (US$178m) resulted in funding raising from US$7.9bn in 2023 to US$8.7bn in 2024.

This rise in fintech funding highlights the rapid evolution of the fintech industry, driven by new developments in regulatory support, embedded finance and AI. 

Rob Lacher, Founding Partner at Visionaries Club, says: "Enterprise tech investment surged in 2024 thanks to the growth of AI-powered companies, but this is just the beginning.

AI is at the heart of Europe’s opportunity to bridge the productivity gap with other regions and take a leadership role in transformative sectors like manufacturing and defence.

Europe is home to many global industrial market leaders with proprietary data and scale that can help shape and enable the application layer in AI. With innovation clusters like Munich further driving this shift, we will see a new wave of AI-driven companies emerge that can reshape European and global economies."

A changing landscape

Many countries across Europe experienced drastic changes in fintech funding, with the UK experiencing the most dramatic decline with an 11% drop to US$16.2bn and Germany undergoing a 4% increase to US$8.2bn.

Even though Italy’s funding fell by 4%, the country received more funding rounds - 345 compared to 324 in 2023 - across industries like cybersecurity, fintech and healthtech. 

Organisations like UK-based Flo Health, Swiss-based EraCal Therapeutics and German-based ITM Radiopharma led significant advancements in European health tech through their innovative tech-based solutions.

These developments resulted in the healthcare sector overtaking energy as the most-funded sector, receiving US$10.8bn.

These changes across Europe represent the diversification of funding sources and destinations across the continent that are redefining the European VC ecosystem and driving competition. 

Diyala D'Aveni, Head of Vento and Producer of Italian Tech Week explains: “Italian tech continued to make strong progress in 2024, with more funding rounds overall, including more pre-seed and seed rounds, demonstrating strong momentum in the growing ecosystem.

"In particular healthtech and enterprise tech companies raised more this year than last year. With a new generation of founders emerging that are inspired by Europe’s success stories there is huge potential for Italian tech to grow and join Europe’s leading tech nations over the next few years.” 

BankTech Ventures

The US strategic investment fund, BankTech Ventures, experienced similar significant milestones in funding in 2024.

By investing over US$50m in portfolio companies, the company has highlighted its commitment to investment and investing in the banking sector. Its 2024 success points to a fintech funding increase on a global scale, a rise not exclusively tied to Europe. 

Key achievements of BankTech Ventures in 2024

• Reached a total investment of over US$50m
• Evaluated over 1,500 companies
• Conducted over 500 founder calls
• Made investments in agentic AI, enhanced customer experience and standardised data collection
• First portfolio company exit with Adlumin
• Shortlisted for ‘Fintech Partner of the Year’ award at the US Fintech Awards
• Named a finalist for ‘Best Venture Capital Firm’ for the Benzinga Fintech Deal Day and Awards
• Finalist for the Banking Tech Awards

Carey Ransom, Managing Director of BankTech Ventures, explains: “As we continue to invest in and support innovation in the transformation of banks, we are proud to see our progress, investment successes and efforts recognised across the industry. 

“The momentum we’ve built over the past few years reflects not only our commitment to fostering innovation, change and strengthening the backbone of banks but also the importance of disciplined investing, especially in today’s challenging environment.

"We’re excited for what’s to come in 2025 as we continue this focused approach.” 

BankTech Ventures continues to secure its position as a leader in redefining community banking through innovative technological investments.

Its significant investment highlights a trend of targeted funding focusing on specific areas within fintech, especially for regional and community banks.

By doing so, the firm demonstrates the need to blend innovation with industry-specific needs through crafting strategic, long-term partnerships.

The future of fintech funding in Europe 

Europe and the world's rise in fintech investment will support its growth to embrace new technologies like blockchain and AI and meet the growing demand for user-centric, sustainable financial solutions.

By doing so, the fintech industry can drive advancements in payments, digital banking and embedded finance while securing its position as a sought after industry in the VC landscape, one that fosters competition and collaboration across borders.

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