Fintech Conference Shows Mixed Sentiments Amid Uneven Growth
What’s going on here?
The recent fintech conference, Money20/20, held in Amsterdam, highlighted a mixed mood among attendees, with significant focus on artificial intelligence (AI) and cryptocurrencies.
What does this mean?
Fintech is navigating choppy waters in Europe. Damien Dugauquier, co-founder of iPiD, pointed out that fundraising has become tougher due to weaker economic growth compared to the US and Asia. Venture capital funding in Europe plummeted to $9.2 billion in 2023 from $26 billion in 2022, and by May 2024, deals had only reached $4.4 billion. Despite these hurdles, companies are adjusting, focusing on profitability. For instance, Monzo celebrated its first annual
profit
and secured £340 million ($511 million) in March, led by Alphabet. Similarly, TerraPay raised over $100 million last year through debt and equity financing.
Why should I care?
For markets: Funding struggles continue.
European fintechs are increasingly looking to US markets as they face difficulties raising capital locally. European governments are making efforts to improve local funding access, but until then, the funding gap may persist. With $2.5 billion in assets, Portage Ventures noted that market sensitivity is heavily influenced by news and geopolitical events.
The bigger picture: A shift in focus.
European fintechs are pivoting towards profitability due to restricted access to capital. Kunal Jhanji from BCG observed this
trend
, with firms like iPiD now taking significantly longer to close funding rounds – eight months for a recent $5.3 million round compared to just three months two years ago.
