European Fintech Funding Drops to €367M in October 2020, Nearly Half the 2020 Monthly Average

Following a rollercoaster 2020, the amount of VC funding flowing into Europe’s fintech sector seems set to reduce significantly in quarter four of 2020. VC investments into Europe’s fintech sector totalled €367 million across forty four deals in October 2020.

According to the research data analyzed and published by Comprar Acciones, it was one of the lowest monthly figures in 2020 seeing as the monthly average since January 2020 was €657 million.

Globally, fintech startups raised a cumulative $3 billion across 208 deals in October according to GoMedici. Compared to September 2020, there was a 54.4% month-over-month decline in value and a 19.6% drop in transaction volume.

In September 2020, European fintech companies received $1.7 billion in funding, while in October 2019, the figure was €1.1 billion.

 A key reason for the October 2020 slump was the fact that there were no deals worth more than €50 million in that month. The highest value deal was Primary Bid’s Series B funding round worth £38.5 million. However, the number of deals was at par with the forty five deals posted in October 2019.

In quarter two 2020, Europe received a total of €1.7 billion in funding while in quarter three 2020, the figure increased to €2.6 billion. That was a significant drop from the €5.6 billion reported in the first half of 2019 according to McKinsey.

Moreover, the highest VC deal in the first ten months of 2020 was Klarna’s $650 million. N26 had the second highest at $570 million while Revolut had $550 million, taking third place.

Globally, the US took the lead in October 2020 with a 59.8% share of global funding value in the fintech sector. According to S&P global, US-based startups raised 30.2% more in the first half of 2020 than they did in the first half of 2019. On the other hand, Asia Pacific raised a cumulative $3.9 billion in the first nine months of 2020, marking a 46% decline year-over-year.