Pulse of Fintech H1 2021 – EMEA

In H1’21, fintech investment in EMEA reached $39.1 billion with 792 deals.

In H1’21, fintech investment in EMEA reached $24.3 billion with 791 deals.

EMEA region sets numerous records as fintech investment hits $39 billion

Total fintech investment in the EMEA region continued to surge, with over $39 billion invested in H1’21, compared to 2020’s total of $26 billion. The region also shattered its previous annual high for fintech VC investment, attracting $15 billion in H1’21, compared to $9 billion during all of 2020.

Top deals included the $14.8 billion deal by Refinitiv, the $2.6 billion acquisition of Itiviti by Broadridge Financial Solutions,¹ the $1.5 billion SPAC merger of Paysafe Group with Foley Trasimene Acquisition Corp.,² and two VC raises totaling over $1.9 billion by Klarna. Key H1’21 highlights from the EMEA region include:

A diversity of jurisdictions attracting big investments

The EMEA region attracted numerous large deals in H1’21; these deals extended well beyond the UK, Germany and Sweden — from the $800 million PE investment in Abu Dhabi-based Group 42 and the $600 million PE buyout of Ireland-based Fenergo to $100 million+ VC funding rounds in the Netherlands (i.e., Mollie, Bunq), France (e.g., Ledger, Market Pay, Shift Technology, Alan, and others ), Austria (i.e., BitPanda), the Czech Republic (Twisto), and Saudi Arabia (Tamara).

Barpgraph - Total investment activity in fintech in EMEA

Wealthtechs attracting significant interest in H1’21

Wealthtech was an incredibly hot area for investment in the EMEA region, with US-based JP Morgan acquiring UK-based Nutmeg for $989 million and Germany-based Trade Republic raising a $900 million VC funding round during H1’21.

Digital banks continue to draw attention

Investment continued to pour into digital banks in the EMEA region in H1’21, including a $443 million raise by Starling Bank and a $110 million raise by Solarisbank. Investors in Europe are beginning to make bets on which banks will evolve into truly pan-European banks able to fulfill the diverse needs of their customers.

Fintech business models gaining traction

As a result of the pandemic, consumers across the EMEA region have gotten more comfortable with digital products and services which has helped drive uptake for digital banking, insurance, wealth management, and other products. This has helped a broad range of fintechs in the region to grow and, therefore, attract larger investments.

Corporate investment at an all-time high

Corporate-affiliated VC investment in the EMEA region soared to a record high in H1’21, with $5.2 billion invested compared to $5.1 billion in all of 2020. Given the digital trends that have accelerated as a result of COVID-19, many corporates across the financial services sector have turned their attention to rapid digitization, whether by making direct investments, acquisitions, or forming partnerships with fintechs.

Trends to watch for in H2’21

stronger focus on the B2B space, including areas like SME lending
increasing interest in M&A, IPOs, and potentially mergers with US-based SPACs
more fintechs embracing ecosystem models in order to act as a one-stop shop for customers
growing focus on ESG and sustainability-focused fintech offerings.

This article is featured in Pulse of Fintech H1’21.

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VC investments surge and cross-border M&A more than doubles all of 2020.

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global and regional analysis with key investment data and insights
top fintech trends for 2021 and beyond
interview with Jason Pau, Chief of Staff, International to the Chairman and CEO, Ant Group
fintech segment insights for a deeper dive into payments, insurtech, regtech, wealthtech, cybersecurity, blockchain and cryptocurrency
spotlight article, Putting big data at the heart of decision-making.

To learn more about the analysis and topics raised in this edition, or to discuss your organization's unique fintech agenda and roadmap, please contact your local KPMG advisors or the contributors in this publication.