Fintech Investment Rises Amidst Europe’s Declining Trends
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New ideas in AI and embedded finance are helping fintech funding bounce back, according to numbers from Q3 shared by Dealroom.
In Q3 2024, while European startups raised $11.3 billion—35% less than last year—fintech showed a different story, recovering from a rough patch in 2023. Funding for fintech startups went up by 45% compared to last year, reaching $1.6 billion.
Generative AI Raised $165 Million Across All Sectors In Q3
AI technology is still a big part of the startup world in Europe. Generative AI, in particular, has caught the attention of investors, raising $165 million across all fields in Q3. So far this year, GenAI companies have secured $3.3 billion, which is 8% of all European venture capital funding.
Even though there are fewer investments for later-stage companies, breakout-stage, and early-stage deals have stayed steady throughout 2024. By the end of the year, there is expected to be $33 billion available for more growth in 2025.
Remus Brett, a partner at LocalGlobe and Latitude, stated that Europe’s fintech industry is back strong, as these funding numbers show. Fintech startups, many of which are now focused on AI, are speeding up innovation for both businesses and consumers, creating more chances in this $30 trillion market. Also, thoroughbred fintech firms making over $100 million a year are helping growth, creating jobs, and changing the scene.
Fintech Startups Had 370 Funding Rounds Worth $6.4 Billion In Q3 2024
Fintech funding had ups and downs in the third quarter of 2024, going down from Q2 and not matching the stronger activity of previous years. S&P Global Markets reported that globally, fintech startups had 370 financing rounds valued at $6.4 billion in Q3 2024. These numbers show a 22% drop in the number of rounds but an 8% increase in money raised compared to last year. The total amount was down 27%, and the rounds dropped by 20% from the last quarter.
As expected, the US stayed the top spot for fintech venture capital, with $2.3 billion in the quarter, though the number of deals fell by 22% compared to last year.
The UK, which is a big fintech center, saw funding rise by 60% to $600 million compared to the previous year. Although, the number of deals went down by 14%, from 37 to 32.
India also did well, with funding reaching $420 million, a 37% increase from last year. The deals also rose to 34, a 10% rise compared to the preceding year.
Payments, which have always been a hot area in fintech, saw funding increase by almost 91% in Q3 to $2.35 billion, even though the number of deals dropped by 30% to 79 from the previous year.
