Innovations in AI and embedded finance have sparked a recovery in fintech financing, according to third-quarter figures compiled by Dealroom.
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While funding for European startups faltered in the third quarter of 2024, with startups raising a total of $11.3 billion – down 35% from the same period last year – fintech has held up the trend, recovering from a slowdown in 2023.
Funding for fintech startups increased 45% year-over-year in the third quarter of 2024, reaching $1.6 billion.
AI technologies continue to be a driving force in the European startup landscape. Generative AI, in particular, has seen significant investor interest, with $165 million raised across all sectors in the third quarter. GenAI companies have raised a total of $3.3 billion so far this year, representing 8% of total European venture capital funding.
Despite a decline in late-stage investments, early-stage and early-stage deals remained steady throughout 2024. With a projection of $33 billion in dry powder by the end of the year , the ecosystem is poised to continue its momentum in 2025.
Remus Brett, General Partner of LocalGlobe and Latitude, comments: “The European fintech sector is back with a bang, as these funding figures confirm. Fintech startups, most now focused on AI, are further accelerating B2C and B2B innovation and opening up more opportunities in this area. A $30 trillion industry. Additionally, the emergence of “pure” fintech companies exceeding $100 million in annual revenue is driving growth, job creation and reshaping the landscape.