In Q1 2024, Europe experienced an increase in fintech venture capital (VC) funding, reaching a total of US$2.2 billion after rising by 22% quarter-on-quarter (QoQ), data from CB Insights’ “State of Fintech Q1 2024” report show. This is in stark contrast to the overall global fintech funding landscape which saw a decline of 16% compared to the previous quarter, dropping to US$7.3 billion, the lowest since 2017.
Notably, Europe was the only major global region to see fintech funding increase in Q1 2024, underscoring its enduring attractiveness to investors.
Against this backdrop, we’ll look today at the key deals that shaped Europe’s fintech industry in Q1 2024. We’ll focus on the largest VC funding rounds secured by fintech and insurtech startups in the region during the quarter, shedding light on these companies’ offerings, growth strategies, and plans for the future.
Monzo, a British digital bank, raised GBP 340 million (US$431 million) in a Series I funding round in March 2024, reaching a valuation of GBP 4 billion (US$5 billion). The Series I was the largest VC round closed by a fintech or insurtech startup in Europe in Q1 2024.
Founded in early 2015, Monzo provides checking accounts, debit cards, savings accounts, access to three exchange-traded funds (ETFs) and some credit products. The company, which became a regulated bank in August 2016, serves more than 9 million users in the UK, and is one of the largest digital banks in the country.
Monzo said it would use the proceeds from its Series I to fuel its expansion plans, on product development initiatives, and to broader accessibility to its services. The company said it became profitable in March 2023. In 2023 alone, it added two million customers, and served 400,000 business customers.
Flagstone, a British cash deposit platform, announced in March a GBP 108 million (US$138 million) equity investment by Estancia Capital Partners, a US financial services specialist private equity firm with deep expertise in the cash management market. The round was the second largest deal secured by a fintech or insurtech startup in Europe in Q1 2024.
Founded in 2015, Flagstone provides a fintech platform aimed at assisting UK savers in optimizing their savings potential. Over the years, Flagstone has emerged as one of the largest cash savings platforms in the country, boasting a diverse panel of banks and savings accounts. Individuals, small and medium-sized enterprises (SMEs), and charities, either directly or through various fintech platforms, financial advisors, or brand partnerships, can access over 200 savings account offerings from 60 prominent UK cash savings providers via Flagstone.
Serving a customer base of over 600,000, Flagstone’s total assets under administration (AUA) stands at more than GBP 11 billion (US$13.7 billion). It says its AUA increased by more than GBP 1 billion (US$1.2 billion) per quarter in 2023 as more personal and business savers looked to maximise the interest earned on their cash.
Flagstone achieved profitability in December 2022 and has sustained accelerating profitability since then. The company’s growth strategy focuses on forging robust partnerships, establishing scalable operational functions, and delivering seamless cash solutions.
Solaris, a credit institution headquartered in German, announced in March the closing of its Series F funding round, securing EUR 96 million (US$104 million) in additional capital, along with a financial guarantee of up to EUR 100 million capital equivalent. The Series F was the three largest deal secured by a fintech or insurtech startup in Europe in Q1 2024.
Founded in 2015, Solaris is a leading embedded finance platform in Europe, offering a proprietary modular business-to-business (B2B) tech stack and scalable licensing system. The company serves a diverse range of partners, from global non-financial corporations to innovative fintech firms, allowing them to deliver customer-centric financial services seamlessly across various industries. In 2022, it recorded net revenues of EUR 130 million.
Solaris said it would use the proceeds from its Series F to onboard the ADAC (Allgemeiner Deutscher Automobil-Club) credit card program, strengthen its core capital and invest in the resilience of its platform. With a focus on achieving profitable growth over the next five years, the company aims to concentrate on its main vertical markets and provide accessible financial products such as cards, accounts, and lending.
DataSnipper, an intelligent automation platform for audit and finance professionals from the Netherlands, raised a US$100 million Series B in February, reaching a valuation of US$1 billion. The Series B was the fourth largest round secured by a fintech or insurtech startup in Europe in Q1 2024.
Founded in 2017, DataSnipper provides an artificial intelligence (AI)-powered platform that brings efficiency to the process of audit. The platform embeds automation directly into Excel, eliminating crushing manual work by letting auditors simply “snip” numbers from any file, such as an invoice, bank statement or inventory document. These “snips” automatically reconcile against transactions, creating airtight audit trails with a click.
DataSnipper has recently released new product suites to better serve finance professionals across diverse sectors. Its Cloud Collaboration Suite allows for secure and seamless real-time coordination across distributed teams, while its AI Suite lets users ask questions in natural language, and then automatically analyze and surface insights from any unstructured documents and data.
In March, PPRO, a leading local payments platform, announced the completion of a dual tranche funding round totaling EUR 85 million (US$93 million) to support its growth into key markets, expand its global network of local payment methods, and assist in strengthening its core teams across legal, compliance, and commercial. The round was the fifth largest deal secured by a fintech or insurtech startup in Europe in Q1 2024.
Founded in 2006 and headquartered in the UK, PPRO provides digital payment solutions to businesses and banks so that they can scale their local payment services through one connection. Stripe, PayPal, and JP Morgan are just some of the names that work with PPRO to accelerate their roadmaps, boost their conversions, and eliminate the complexities of local payments.
Following its US$93 million fundraise, the company entered the US market in April, enabling global payment service providers and merchants to reach millions of US consumers via a single API. This followed PPRO’s previous successful geographic expansion into the Asia-Pacific (APAC) region and Latin America.
In January, Hyperexponential, a leader in pricing decision intelligence (PDI) software, announced the completion of its Series B funding round, securing a total of US$73 million. The Series B was the sixth largest deal secured by a fintech or insurtech startup in Europe in Q1 2024.
Hyperexponential serves insurance and reinsurance companies in the multi-trillion-dollar global property-casualty insurance industry, which protects individuals and businesses from a wide array of risks, such as climate change, geopolitical unrest, and cyberterrorism.
Hyperexponential’s flagship PDI platform, hx Renew, enables insurers to leverage large and alternative datasets, develop and refine rating tools rapidly, and employ sophisticated machine learning (ML) approaches to price risk and make data-driven pricing decisions at the portfolio and individual level.
Since the company’s Series A in 2021, Hyperexponential has grown sales 10x while staying profitable, serving some of the world’s largest insurers, including Aviva, HDI, and Conduit Re.
Hyperexponential said it would use its Series B to support its expansion into the US as the company targets opening its New York office this year. It will also enable increased investment in new product capabilities to serve growing client demand in adjacent insurance markets, including the SME insurance sector. The company plans to double its global team to over 200 in the next year.
Element, an insurtech startup based in Germany, closed in March a EUR 50 million funding round. The round was the seventh largest deal secured by a fintech or insurtech startup in Europe in Q1 2024.
Established in 2017, Element is a leading player in the insurtech landscape operating under a cloud-based model and offering innovative white-label insurance products. The company’s core mission is to deliver insurance solutions that are not only the fastest and most flexible, but also unfailingly reliable and efficient, covering the entire “B2B-to-any-end-user” (B2B2X) value chain.
Element emphasizes speed, flexibility, reliability, and efficiency in their operations, aiming to empower partners to create and distribute personalized insurance products and build robust ecosystems. Its white-label insurance products are supported by a fully digital and efficient infrastructure. The company is licensed by the German Federal Financial Supervisory Authority (BaFin).
Element has garnered substantial support from both industry insiders and growth investors, raising over EUR 90 million from notable investors such as SBI Investments, Mundi Ventures, Signals VC, and finleap. Recently, it partnered with Warranty Expert, the Baltic States’ leading extended warranty and purchase protection service provider, to launch multiple products across Europe.
Finom, a neobanking startup from the Netherlands, secured in March a EUR 50 million (US$54 million) Series B. The deal was the eighth largest VC round secured by a fintech or insurtech startup in Europe in Q1 2024, and brought the company’s total raised to over EUR 100 million.
Founded in 2019, Finom aims to facilitate financial management for entrepreneurs and SMEs worldwide by offering an all-in-one financial B2B solution. This solution integrates banking functions, accounting, financial management, and invoicing into a seamless, mobile-first platform, enabling businesses to focus their resources on growth.
With exponential growth over the past two years and a strong presence in key European markets such as Germany and France, Finom claims it is on track to become a unicorn startup by 2025.
The company plans to use the proceeds from its Series B to enhance its product offerings and continue shaping the future of financial services for SMEs in Europe. Key investment targets include improving the speed and functionality of the web and mobile versions, enhancing security measures, and expanding marketing activities to reach a broader audience.
This year, Finom wants to reinforce its presence in current markets while strategically expanding into new territories, with a particular focus on Poland.
10x Banking, a cloud-native software-as-a-service (SaaS) core bank operating system, raised in January US$50 million in a new funding round. The deal was the ninth largest VC round secured by a fintech or insurtech startup in Europe in Q1 2024.
Based in the UK and founded by former Barclays CEO Antony Jenkins in 2016, 10x Banking empowers banks to move from monolithic to next-generation core banking solutions delivered through the world’s most comprehensive and powerful cloud native SaaS bank operating system.
With its secure, reliable, scalable, and modular core banking platform SuperCore, 10x Banking supports highly customizable product behaviors and accounting rules, integrates with banks’ wider technology estates, and harmonizes with local and regional compliance and regulatory requirements. SuperCore enables banks to deliver products, services, and customer experiences to retail and SME customers faster and more cost-effectively.
Building upon its success in the UK, 10x Banking has expanded its footprint into Australia and New Zealand, with plans for further strategic expansions as banks seek to adopt “neo-core” banking systems to accelerate their digital transformation and effectively compete in the marketplace.
The US$50 million funding round, led by BlackRock and JPMorgan Chase, will support 10x Banking’s growth in the competitive core banking market.
Flowdesk, a digital asset firm, announced in January the closing its US$50 million Series B. The deal was the tenth largest VC round secured by a fintech or insurtech startup in Europe in Q1 2024.
Founded in 2020, Flowdesk is a full service digital asset trading tech firm that offers market making, over-the-counter (OTC) and treasury management. The company has pioneered the concept of “market-making-as-a-service” (MMaaS), offering a novel approach to liquidity management on secondary markets. Through its MMaaS infrastructure and global trading team, Flowdesk empowers crypto projects, exchanges, and institutions to manage their own liquidity effectively.
Flowdesk is based in France with offices in Singapore and North America. The company claims it is experiencing a threefold increase in revenues year-over-year, driven primarily by strong growth in the APAC region. Flowdesk was also recently named as an approved liquidity provider for the Grayscale ETF, marking another milestone in the institutionalization of its flow after its recent collaboration with Societe-Generale Forge.
Flowdesk plans to use the proceeds from its Series B to consolidate its position as a leading market-making service provider and expand its OTC offering. In addition, Flowdesk plans to expand regulatory coverage in Singapore and in the US. The raise will also be invested into expanding offices in financial hubs and key hires.
Featured image credit: Edited from freepik
