March 29, 2022

Is European fintech's first quarter a sign of (slower) things to come?

There’s been a handful of headline-grabbing rounds, but have fintech investors turned more conservative this year?

Amy O'Brien

5 min read

Jack Pierse and Aidan Corbett, the cofounders of Wayflyer

Fintech has gobbled the lion’s share of capital in European tech for the past two years. But after a rocketship 2021, there are signs that growth might be cooling. 

European fintechs raised $7.2bn in the first quarter of 2022, according to Dealroom data — in line with the $7bn raised in the last quarter of 2021. Sifted looked at rounds raised by companies founded in 2005 or later and founded or headquartered in Europe.

The headline figure was buoyed by mega rounds raised by and Qonto. And the number of overall deals actually fell on quarter. 


The sector closed 220 rounds as of Monday, down from 271 in Q4 2021 — which had been a drop from the 300+ totals in previous quarters. The Q1 2021 total is also the smallest number of rounds since Q4 2015, when the sector closed 216 rounds.

It’s worth noting that given the reporting lag in venture, there are likely many more deals that will be announced in the future. But investors and founders say that given predictions for a global slowdown and softening public markets, the exuberance of 2021 may have faded slightly. 

“So far I wouldn’t say this climate has necessarily stopped things, but we're starting to see softness across the board,” says Nahu Ghebremichael, partner at Singular.

“It’s more an indication of hesitation — things are taking a little longer. If you think of the last three quarters of 2021, things started to get kind of crazy, there were lots of inflated valuations, and the pace of decision-making and deployment was super fast.”

Top-heavy fundraising

Overall fundraising  in the first quarter was pushed up by’s mammoth $1bn Series D and Qonto’s healthy €486m Series D in January. 

But further down the fundraising food chain, the picture wasn’t so rosy. 

European fintechs raised a total of $8.8m in pre-seed rounds (of up to $1m each) in the first three months of the year. That’s the lowest cumulative total in almost a decade — since they reached $5.7m in Q3 2012. In Q4 2021, the pre-seed funding total was $20.5m.

At seed stage, it was a similar story. Overall, Europe’s fintechs raked in a total of $116m seed funding — the lowest total at this stage in almost five years, when it reached $114m in Q3 2017. 

It’s worth noting that the reporting lag is often most pronounced in the earliest stages like pre-seed and seed. This is because these rounds are often self-reported and there is no standard classification for deals.

So which European fintechs picked up the largest chunks of these headline figures?

European fintech’s 10 largest rounds

Payments giant’s raise made it Europe’s second-most valuable startup, after Klarna, at a new $40bn valuation. But the absence of European VCs on’s cap table makes it quite the anomaly among local fintech unicorns — and means European investors won’t benefit too much in the case of an exit.  

In second place was French neobank Qonto. It was the largest-ever fundraising round for a French fintech and pushed the neobank’s valuation up to €5bn. 


At the beginning of February, payments company GoCardless became the UK’s 22nd fintech unicorn — and the first to join the UK fintech unicorn club this year — with its $312m Series G funding round.

Other top 10 raises included France’s payroll startup PayFit, which reached unicorn status after its $289m Series E in January; ClearBank’s $229m late VC round in March; and Dublin HQ'd revenue-based financing (RBF) startup Wayflyer’s $150m Series B in February. 

And the first quarter also marked a huge moment for the Italian startup ecosystem, which got its first unicorn since the dotcom boom when Milan-based buy now, pay later startup Scalapay raised $213m in February from a roster of foreign investors including China’s Tencent and US giant Tiger Global. 

Fintech’s hottest subsectors

Payments dominated funding in Q1 2022, receiving $2.1bn — relatively similar to the last four quarters. Banking was the second most attractive sector to investors, raking in $1.5bn in the first three months of the year — down on the lofty heights of $2.7bn and $2.2bn reached in the last two quarters. 

Mortgages and lending ranked third as a sector, receiving $826m in the quarter, just above the $816m that financial management solutions attracted — totals that were both slightly down on the last three quarters, too. 

Biggest geos for European fintech

Carrying on the trend from the last few years, the UK continued to dominate European fintech funding, coming out on top with $3.3bn invested in total. France has had a particularly strong quarter, overtaking Germany (which occupied second place for 2021), attracting $1.6bn — already more than half the $2.5bn it attracted in the whole of 2021.

Germany slowed down a little, receiving $261m investment in its fintechs, and the Netherlands overtook fintech star Sweden, raising $110m in total for its startups — ahead of Sweden’s $97.2m. 

What lies ahead?

Despite some cooling in the market, investors say the market for the best performing companies will continue to be strong. 

And when it comes to the process of fundraising, founders of more established, later-stage fintechs seem more confident. 

“Whilst the turbulent macroeconomic situation has been challenging for many, we’ve not experienced any change in investor appetite,” says Charles McManus, CEO at ClearBank, which raised a $229m late VC round this month.

“We had several interested parties who have been following ClearBank’s growth story for some time, and rising interest rates are also net positive for ClearBank’s economics — all our customer deposits are geared to Bank of England’s base rate.” 

But founders of fintechs at an earlier stage of their life cycle say that discussions about the wider economic climate came up often with investors.

“We are currently in early discussions for our seed round, and the macroeconomic situation definitely comes up regularly in VC meetings,” says Lena Sonnen, CMO and cofounder of Berlin-based investment platform Konvi, which announced its $900k pre-seed this month.

“I strongly feel like the overall uncertainty as well as stock market fluctuations affect the valuations of small startups. In addition, the overall dips in valuation multiples for growth stage startups are definitely playing a role here.” 

Where companies are at an earlier stage and have less proven performance data, investors are “taking a breath and looking at things more closely,” says Ghebremichael.

“It’s not that the competitiveness isn’t there, and investor sentiment is still positive. But the FOMO is less crazy.” 

Amy O'Brien

Amy O'Brien is a reporter at Sifted. She covers fintech and writes our weekly fintech newsletter . Follow her on X and LinkedIn