In Europe, fintech has become a leading start-up sector, with some of the continent’s largest technology companies operating in the space.
These success stories have not only spurred innovation, but also trained some of Europe’s most active angel investors, who now play a vital role in the growth of their local ecosystems, according to a new report from Atomico, an investment firm. London-based venture capitalist (VC).
The 2024 edition of the State of European Tech report, released in November, looks back at the evolution of the European technological ecosystem, the progress made, but also the obstacles to overcome for lasting success.
According to the report, European companies valued at more than $1 billion have proliferated in recent years, with the number of unicorns created over the past decade five times higher than pre-2015 levels. The financial sector in particular has been behind this surge, accounting for 24% of all unicorns formed in the last five years.
Fintech: a leading technological sector in Europe
Responses to a survey of industry players for the report underline this dominance, with fintech companies like Revolut, Klarna, Adyen and Wise standing out as emblematic of the growth of the European technology sector over the past decade.
Revolut was named by 15% of respondents, ranking second after Spotify (26%). These companies are followed by Klarna and Adyen, with more than 110 and more than 90 mentions respectively, highlighting the characterization of Europe as a global center of excellence in finance. Wise is another fintech company cited over 50 times.
Revolut is a neobank and financial technology company headquartered in London that provides banking services to retail and business customers, including foreign exchange, debit and credit cards, virtual cards, Apple Pay, interest-bearing “safe deposit boxes”, personal loans and buy now, pay later. (BNPL) and stock trading.
Created in 2015, the company serves more than 45 million individual customers and 500,000 business customers worldwide, operates in more than 140 regions and supports more than 25 currencies.
Recently, Revolut hit a valuation of $45 billion after a secondary share sale, making it worth more than some of Europe’s biggest banks, according to Reuters. reported. In July, he was granted a UK banking license after a three-year wait, but with some restrictions.
Klarna East a leading global payments and shopping service with 85 million active end users and over 575,000 merchants across 26 countries. Founded in 2005 in Stockholm, Klarna offers direct payments, post-delivery payment options and installment plans in a seamless, one-click shopping experience.
Klarna reached net profit of SEK 216 million (US$19.8 million) in the third quarter, up 57% year-on-year (y-o-y) and marking the second profitable quarter for the company.
Klarna recently filed for an initial public offering (IPO) in the United States. Although no financial details were provided, analysts in October estimated Klarna’s implied valuation at around $14.6 billion.
Adyen East a Dutch payments company with acquiring bank status that allows businesses to accept online, mobile and point-of-sale (POS) payments. Founded in 2006, Adyen provides end-to-end payment capabilities, data-driven insights and financial products in a single global solution, serving companies such as Meta, Uber, H&M, eBay and Microsoft.
Adyen is listed on the Euronext Amsterdam stock exchange with a market capitalization of more than 47 billion dollars.
Finally, Wise, formerly known as TransferWise, East a global technology company, specializing in cross-border transactions. Serving individuals and businesses, Wise allows customers to hold 40 currencies, transfer money between countries and spend money abroad.
Launched in 2011, Wise is one of the world’s fastest-growing and profitable technology companies, supporting approximately 12.8 million people and businesses and processing approximately £118.5 billion ($151 billion). ) of cross-border transactions during its 2024 financial year. Wise is listed on the stock exchange. on the London Stock Exchange under the symbol WISE.
Fintech entrepreneurs are shaping the European tech ecosystem
European fintech success stories go beyond operational growth and aim to foster local innovation. This is evident both in the number of investments made by European fintech founders, but also in their contribution to building their local market.
Taavet Hinrikus, co-founder of Wise, is currently the most active angel investor in Europe. Hinrikus has made more than 90 investments to date, around half of which are based in the UK or Estonia, Wise’s two key hubs.
Another high-profile angel investor is Tom Blomfield, co-founder of UK-based GoCardless and Monzo. Blomfield has made over 40 investments to date, 60% of which are UK based. He is the fourth most active angel investor in Europe.
Other fintech founders in the ranking include Maximilian Tayenthal, co-founder of N26, ranked 8th with over 30 investments to date, and 68% of these investments being made in Germany; and Stefan Jeschonnek, co-founder of SumUp, ranks 9th with over 30 investments and 45% of those investments made in his home country of Germany.
Europe’s technological dynamics
Europe has become a world leader in technology. The continent is now home to more than 35,000 startups, a four-fold increase from fewer than 8,000 in 2015. Growth-stage companies, meanwhile, have seen their number increase eight-fold to more than 3,400.
The tech workforce has also grown significantly, with 3.5 million people now employed in the sector. The vast majority of these employees joined the group over the last decade, with almost 3 million jobs created during this period. Its compound annual growth rate is 24%, comparable to that of the United States.
Total funding over the past decade is ten times that of the previous decade, from $43 billion to $426 billion. This year, investment levels are on track to reach around $45 billion, three times more than the $15 billion recorded in 2015.
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