(Image courtesy of Monzo)
As the year draws to an end, the frenzy for fintech investments in Europe shows no sign of slowing with three new mega-deals announced within days of each other.
Challenger bank Monzo raised a reported $500 million investment led by Abu Dhabi Growth Fund at a $4.5 billion valuation. Cloud banking platform Mambu secured €235 million (around $265 million) in a round led by EQT Growth, while expense management software provider Pleo scored $200 million from investors including Coatue and Alkeon Capital. Mambu and Pleo are worth €4.9 billion and $4.7 billion respectively.
All three deals highlight the outsized level of investor enthusiasm for Europe’s fintech ecosystem which has pushed deal activity to record levels. With the year not even over, around €23.8 billion has been invested in the sector—an increase of 191% from 2020’s total—across 1,095 deals, according to PitchBook data. Europe overtook Asia this year as the second most-funded market for fintech.
The shift to digital driven by the pandemic has accelerated the adoption of new technology in the space from online payments to cloud banking services for incumbent players. Europe is at the forefront globally of many of these new areas of fintech such as buy now, pay later with Swedish giant Klarna and digital-only banking which includes startups like London-based Revolut.
This maturation of Europe’s fintech ecosystem has led to a slew of mega-rounds this year. Highlights include neobroker Trade Republic’s $900 million Sequoia-led Series C and BNPL startup Zilch’s $110 million round. A total of 22 fintech companies reached unicorn status this year including banking software provider Thought Machine and challenger bank Bunq.
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