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Fintech investment in Europe surged in 2021

But investors are backing ‘cockroaches’ and not unicorns


Pete Carvill

Fintech investments across the UK, Germany, and France ‘surged’ in 2021, according to S&P Global Market Intelligence.

The company said that investors put three times as much into fintechs based in those countries in 2021 as they did in 2020.

S&P Global Market Intelligence said: “Total investment in the three countries rose to more than $15bn in 2021, from just over $5bn in 2020, when investment almost halved from the previous year. The UK, home to Europe’s largest fintech hub — London, led the continent’s investment drive with more than $10bn raised, surpassing the pre-pandemic total of $7.65bn in 2019.”

It added: “The UK remained the dominant force in European fintech, attracting almost three times as much investment in 2021 as Germany.”

It was, said Ronit Ghose, global head of banking, fintech, and digital assets at Citi Global Insights, who was quoted in the report, London’s position as Europe’s financial and tech capital continues to make it a natural home for the crossover sector of fintech.

It was the UK’s fintech sector that was the most dominant, having raised three times as much investment in 2021 than Germany.

Interestingly, the nature of investment has begun to change. Whereas investors were once focused on ‘unicorn’ companies that had the potential to be the next Google or Facebook, S&P Global said that investors were now looking for companies that can survive the oncoming economic crisis. These firms were described as ‘cockroaches’ by Ghose.

S&P Global’s report comes out as German software group SAP announced it was looking to acquire supplier firm Taulia. That deal, for an undisclosed amount, is set to be completed by March and will see Taulia operate as a separate company within SAP.