H1 2023 FINTECH WRAP-UP 🌯
Discover Fintech Wrap-Up, a newsletter about all things Fintech & Insurtech in Europe, by BlackFin Tech.
Welcome back BlackFin Tech readers!
While last year’s hot topic in fintech was crypto, 2023 has been all about AI. These two letters are everywhere but paradoxically, as investors, we don’t see many concrete applications in European fintechs and insurtechs. Yet.
As we’ll see later, the first semester of 2023 experienced a huge drop in fundraising for fintechs and insurtechs. There’s no denying that the startup ecosystem was calmer than usual, but at BlackFin, we started to feel a new dynamic in the last couple of weeks.
We looked at startups / sectors that are stable despite the chaotic environment, either because of their resilient business model (such as wealth management fintechs), either because they rely on a bigger trend that is here to stay (e.g. ESG, or the rise of independent workers).
It’s likely that we will have some more news to announce in September - stay tuned folks!
📊 WHAT SHAPED EUROPEAN FINTECH IN 2023
What happened for European fintech in the first semester of 2023?
In two words: a few more deals but way less money raised by startups.
Lets’s dive in:
391 fintechs raised money in H1 2023, equaling a total amount of €3.2Bn
In terms of amount raised, it’s a huge drop compared to last year, with 361 fintechs raising €11.2Bn in H1 2022.
To give you a better idea of how things have changed, the top 10 European fintech deals of 2022 represented €4.3Bn - which is more than what the 391 European fintechs raised in H1 this year.
Both average deal size and median deal size have shrinked: the former falling from €33m in H1 2022 to €9.1m and the latter falling from €8.4m last year to €3m in the first half of 2023.
In terms of geography, UK still leads the race with 125 fintechs raising €1.3Bn. France follows with 63 companies raising almost €500m, overtaking Germany which saw 46 fintechs raising €474m. Here is the split by number of companies that raised funds according to their origin:
In terms of sectors, Banktech is once again the most appealing category, followed by Payments, Investment Banking, Crypto and Wealth Management.
What are the first semester 10 biggest rounds?
Altogether, the top 10 deals raised €839m - compared to €3.5Bn in H1 2022.
In the first semester of 2022, when the economic context was completely different, all of the top 10 European Fintech deals exceeded €200m. This year, only 3 fintechs have raised more than €100m: British regtech Quantexa, French crypto Ledger and German regtech Integrity Next.
In terms of geography, UK leads the top 10 with 5 deals, followed by France (2), Germany (2) and Switzerland (1). While 2022 was all about banktech and payments, regtech has made two of the three biggest deals of 2023 so far!
🍳 WHAT WE SHAPED AT BLACKFIN TECH
Portfolio news
🇩🇪 In January, Hawk:AI raised $17m Series B to accelerate global expansion
🐓 In February, Descartes Underwriting and Agicap joined the French Tech 2023 selection - respectively Next40 and FrenchTech120
🇫🇷 In April, Mooncard secured €37m in equity to continue to support finance decision makers as their role becomes increasingly complex in Europe
🇪🇸 In June as well, Spanish insurtech Bdeo raised 7.5m for international expansion
🏅Last but not least, 3 of our portfolio companies joined Fintech Global’s very selective AI Fintech 100 - a list of 100 of the world’s most innovative AI solution providers for financial services. Congrats to Akur8, Bdeo and Hawk:AI - you rock!
Team news
🙌 Zara joined our British office in London as an Investment Associate. Welcome Zara!
Zara previously worked at TempoCap, a UK-based growth-stage VC fund, where she was focused mainly on B2B SaaS, cybersecurity, and fintech investing. She originally studied Law and French Law at The University of Oxford, but transitioned into tech and VC after co-founding a small company and experiencing the excitement of an investor pitch for the first time.
📚 SHAPING OUR MINDS
Here is a selection of the fintech news that you shouldn’t have missed in the first semester:
Apple’s new savings account sees $1bn in deposits within one week of launch: the Apple Card savings account, launched in April in partnership with Goldman Sachs, offers US consumers a high-yield annual return of 4.15%
🇪🇺 European Parliament Approves MiCA(European Union’s Markets in Cryptoassets) Law Regulating Cryptocurrencies: the regulation aims to ensure that crypto transfers, as is the case with traditional financial services, can be traced and suspicious transactions blocked
🏦 The Bank of England is reportedly planning to reject fintech firm Revolut’s application for a banking licence: Revolut’s existing services will not be affected if it is refused a licence but the company would be unable to offer mortgages and loans to UK customers. Investor Molten Ventures wrote down its stake in cuts Revolut valuation with 40% writedown
💸 UK passes bill to recognize crypto as “regulated financial activity”, boosts adoption in Europe: akin to MiCA, the new act will bring cryptocurrencies and stablecoinsinto the scope of regulations
👋 In France, insurtech Luko announced its takeover by British Admiral and Orange Bank has withdrawn from the retail banking market.
🔈 SHAPING OUR EARS
Because you’ll probably spend some time on the road this summer, here are some of our favorite podcasts:
🧰 Founders: to learn from the best entrepreneurs, before fintech was even a thing
🇩🇪 Startup Insider: a podcast to know everything about the German startup scene
👷 Fintech Leaders: to learn from the today’s best Fintech entrepreneurs
💰 Associated: a podcast that broadens access to VC, one conversation at a time
☕ RESHAPING FINANCE. TOGETHER.
Where to meet us?
🇳🇱 Amsterdam Fintech Week (Sept. 12-15) —> meet Pauline
🇩🇰 Copenhagen Tech BBQ (Sept. 13-14) —> meet Michele
🇩🇪 Bits & Pretzels (Sept. 24-26) —> meet Romain
Have a great summer, see you in September!