Since the start of the year, the continent has minted two more decacorn startups,Revolut and Checkout, and added a record 19 new fintech companies to the ranks of private company unicorns, Crunchbase data shows.
The rise in the number of highly valued and heavily funded fintech startups in Europe shows how the continent is taking the lead in disrupting multiple sectors: from payments and e-commerce to banking, insurance, lending, cryptocurrency and commerce.
It is certainly not just Europe’s fintech sector that is attracting investor interest and crowning the new unicorns. There have been a record number of new European startups valued at $1 billion or more in 2021 across all sectors, Crunchbase data shows, reflecting an escalation in venture funding to the continent in the first half of this year.
In total, there are now 125 private company unicorns based in Europe, according to Crunchbase data.
About a third of them,39 private companies,are in the financial services sector. With the fintech sector emerging as one of Europe’s biggest unicorn creators, we decided to take a look at the best-funded companies in the space and the investors leading the way.
Year of the unicorn
Europe’s fintech unicorns have collectively raised $22.6 billion to date, Crunchbase data shows, and are valued in total at $178 billion.
More than half of the capital, $11.5 billion, was raised this year alone. Nearly half of Europe’s fintech startups joined the unicorn board in 2021, with 19 new companies, including Berlin-based commission-free broker Trade Republic,London-based banker Starling Bank,Paris-based health insurance platform alan and Denmark-based employee smart card company Pleo valued at $1 billion or more by private investors.
Another 13 European fintechs are waiting in our Emerging Unicorns list. These are startups that in total have raised $3 billion and are collectively valued at $9 billion.
For context, there are 100 U.S.-based unicorn startups in financial services, including five that are valued as decacorns. These decacorns include Stripe, the most valued U.S. unicorn, which is based in San Francisco and Dublin, Ireland.
Word to the wise
Europe’s unicorns are also starting to make their exits.
The most recent European financial technology startup to exit is London-based money transfer company Wise,which was valued at $11 billion in a direct listing on the London Stock Exchange in July 2021, and its value increased to more than $13 billion as of Aug. 25. U.S. investors Valar Ventures, IA Ventures, Andreessen Horowitz and U.K.-based Baillie Gifford owned significant stakes in the company. Early investors include Seedcamp,which invested in Wise’s pre-seed round, and IA Ventures and Index Ventures,which led the seed funding.
Leading investors in fintech unicorns.
Index Ventures, Seedcamp and Accel have the highest number of investments in European financial services unicorns, Crunchbase data shows.
Seedcamp stands out for investing in the largest number of early-stage portfolios, while Valar Ventures and Index Ventures have the best track record for Series A investing in companies that become unicorns.
Investors with the largest late-stage portfolio leads include DST Global,Tiger Global Management and TCV.
European fintechs come of age.
Europe’s fintech decacorns have only gotten bigger this year.
Klarna was valued at $31 billion at the beginning of March, a figure that skyrocketed to $45.5 billion in less than three months. According to reports, the Stockholm-based company is considering a public market debut next year.
Revolut was valued at $6 billion in July 2020 through a Series D extension and a year later was valued at $33 billion. Checkout was valued at $5.5 billion and in less than a year, as of January 2021, was valued at $15 billion. These latest rounds of funding were led by two firms; London-based SoftBank Vision Fund led Klarna’s funding round, and New York-based Tiger Global Management led Checkout’s Series C. And both firms co-led Revolut’s Series E funding round.
Funding to European companies in financial services has already peaked at $21.7 billion this year so far, with investments in more than 800 companies. With more than 200 companies each raising $10 million or more in a funding round, we don’t see this sector slowing down anytime soon.
