Latest edition - H2 2020

2020 was a gamechanger. Words became action as the global pandemic made digitalization a critical priority for businesses of every shape and size. The same can be said for incumbent financial institutions, and most importantly, for consumers.

In the latest Pulse of Fintech we give an overview of the fintech landscape through analyzes of global and regional fintech investments as well as key trends and developments within fintech and financial services. 

Sweden was the most active country in the Nordic region in terms of fintech investment

At a global level the pandemic brought many deals to a halt in H1’20, H2’20 reversed the trend as investors and fintechs learned to do business in a new normal.

On a Nordic level Sweden was the most active country in the Nordics in terms of fintech investments. During the second half of 2020, Sweden-based digital bank Klarna raised Europe’s largest fintech-focused VC funding round of 2020: a $650 million raise expected to help fuel its aggressive growth strategy. Open banking also continued to gain traction in the Nordics, with Sweden-based banking aggregator Tink raising $101 million in H2’20. Insurtech continued to grow on the radar of investors in the Nordic region, with different insurtechs aiming at improving specific niches within the insurance value chain; while investment is still modest in the insurtech space, it is expected to grow in the future. Lending companies could face challenges in the Nordic region in H1’20 given the potential credit losses for banks and alternative lenders.

— The investment activity in the Finnish Fintech market in 2020 was very low compared to the previous years, arguably due to the pandemic. We expect Finnish Fintech companies to attract more investment during 2021, says Financial Services Advisor Jami Nordlund

Top 10 European fintech deals 2020

  1. Avaloq — $2.3B, Zurich, Switzerland — Institutional/B2B — M&A
  2. Klarna — $650M, Stockholm, Sweden — Payments/transactions — Late-stage VC
  3. Polskie ePlatnosci — $587.8M, Jasionka, Poland — Payments/transactions — Buyout
  4. Revolut — $580M, London, UK — Payments/transactions — Series D
  5. N26 — $570M, Berlin, Germany — Banking — Series D
  6. Fondcenter — $425.1M, Zurich, Switzerland — Institutional/B2B — M&A
  7. Molo (Financial Software) — $343M, London, UK — Lending — Early-stage VC
  8. October (Financial Software) — $304.2M, Paris, France — Lending — Corporate
  9. Smart2Pay — $260.65M, Laren, Netherlands — Payments/transactions — M&A
  10. Prepaid Financial Services — $211.6M, London, UK** — Payments/transactions — M&A

Top Fintech trends for 2021

From 2020, we learned that with great challenge comes great opportunity; and now in 2021, we expect a rebound in fintech activity.

Here are our top predictions for fintech in 2021

  1. Payments will stay
  2. Embedded finance will emerge as the new North Star
  3. New markets to fintech will emerge
  4. The pipeline for fintech IPOs will grow globally
  5. M&A will make a big rebound
  6. Crypto-assets will become mainstream