European FinTech Funding Plummets: $100M+ Deals Halve in 2024
In 2024, the European FinTech landscape has faced significant challenges, with funding and deal volume experiencing a dramatic downturn. As investors become more discerning, the market is witnessing a shift in focus towards fewer but larger investments. This article delves into the latest European FinTech funding statistics and examines key developments in the sector.
Significant Decline in European FinTech Funding
The year 2024 marked a pivotal moment for the European FinTech market, characterized by a steep decline in both deal volume and total funding:
- Total deals fell to 1,050, a staggering 62% decrease from 2,787 deals in 2023.
- This decline also represents a 68% drop compared to the 3,295 deals recorded in 2020.
- Overall funding amounted to $18.4 billion, reflecting a 47% decrease from the previous year’s $34.6 billion.
Average Deal Size Increases Amidst Declining Volume
Despite the downturn in the number of deals, there has been a notable increase in the average deal size:
- The average deal size in 2024 stood at $17.5 million, up 41% from $12.4 million in 2023.
- This figure marks an 84% increase from the $9.9 million average in 2020.
This trend indicates a shift towards fewer, more substantial investments as investors become more selective in their funding strategies.
Investor Selectivity: Deals Over $100 Million Plummet
Investments in larger deals valued at $100 million or more have witnessed a sharp decline:
- Such deals accounted for $9.6 billion in 2024, a 48% drop from $18.3 billion in 2023.
- Investments below $100 million totaled $8.8 billion, down 46% from the previous year’s $16.3 billion.
This trend reflects a more cautious approach from investors, adapting to changing economic conditions and heightened market uncertainties.
Zepz: A Leading Player in European FinTech Funding
Amid the challenges, Zepz, a London-based digital money transfer service, has emerged as a standout player:
- Zepz secured $267 million in funding, one of the largest European FinTech deals of the year.
- The funding round was led by Accel, with participation from Leapfrog, TCV, and the International Financial Corporation.
This investment will facilitate Zepz’s expansion into core African markets, addressing the fragmented remittance industry through cost-effective digital solutions. Since achieving full-year profitability in 2022, Zepz is poised for further growth, including potential acquisitions of smaller firms.
Conclusion
The European FinTech sector is navigating a challenging environment in 2024, with significant declines in funding and deal volume. However, the rise in average deal sizes and standout performances from companies like Zepz indicate a resilient and adaptive market. For more insights on the evolving FinTech landscape, visit our related articles on FinTech Trends and Investopedia’s FinTech Overview.
