For fintechs in Europe, a whole lot has changed since the start of this year.
The first quarter of 2022 saw megarounds like Checkout.com’s $1bn Series D and Qonto’s €486m Series D — signs that we were still in a hangover phase from the funding frenzy of 2021, when investment into European fintech reached an all-time high of $25.6bn.
In the second quarter, the first signs that the sector was beginning to feel a chill came when the companies like Uncapped and, most notably, Klarna began laying off significant chunks of their staff.
By July, fintech funding in Europe had officially retreated to pre-2021 levels, totalling $13.2bn — the lowest six-month total since 2020.
“We see very few companies out fundraising now as the conditions are clearly challenging, and it’s harder for later-stage [businesses],” says Lucile Cornet, partner at VC firm Eight Roads.
So what can we expect for the last quarter of 2022? To take stock, below we list the companies that haven’t raised in a while.
Keeping it in the (investor) family
Some fintechs tell Sifted they’ve quietly tapped existing investors for a bit more cash to extend their runway — and it’s likely others on this list did the same, but are choosing not to spill the beans.
“Right now the environment is so cold, and the reception is so bad, that you don't want to take a management team and send them out to raise,” Alexandre Moreillon, fintech investor at CommerzVentures, tells Sifted.
“Every company in our portfolio that was somewhat performing — or even those that were a bit wobbly — got internal rounds.”
These rounds often don’t get announced because they’re either an extension of a company’s previous round on the same terms or share the same lead investor. At a push, companies might sneak one more investor in.
“But we don’t really speak about it because, although there’s nothing negative per se, there’s less of something to celebrate,” says Moreillon.
“It won’t have raised the valuation — there’s no big milestone that’s been reached. But they’ve scored more runway without getting distracted.”
Turning tides
When Klarna, formerly Europe’s most valuable startup, suffered a massive valuation drop of 85% in July, it opened the floodgates for downrounds to begin. Companies will be trying to avoid having to “mark to market” at valuations that match the current climate, rather than that of the past couple of years. But some will have no choice: Mortgage lender Habito is reportedly in this situation.
For other fintechs, the stock market slump has meant the end of the road. German digital bank Nuri recently filed for insolvency, and Vybe, the French neobank for Gen Z, announced it was shutting down last month.
Other fintechs like Capdesk and Seedrs have been snapped up by their US rivals — and investors tell Sifted they expect a bigger wave of M&A next year.
Who’s overdue a funding round?
Sifted has analysed Dealroom data, and using our European fintechs to watch list, worked out the region’s most prominent fintechs that last raised in Q1/Q2 2021 or in 2020. We’ve spoken to each company to confirm the data.
Most are Series B stage or later, which means they could be looking around to raise externally right now, have bagged a secret internal round or have managed to wipe out their burn rate and reach profitability.
These are the fintechs we’re watching in the next quarter.
Last raised in Q1/Q2 2021
Mollie
HQ: Netherlands
Founded: 2004
Subsector: Payments
Last raise: $800m Series C, June 202.
Unannounced round since then? No
Actively looking to raise? Although the company wouldn’t disclose any fundraising detail, the company did receive €55m as informal capital contributions in 2021, according to filings.
Layoffs? No, actively hiring for 64 roles.
Profitable? Company’s losses stood at €69.6m for 2021, according to company records.
OakNorth Bank
HQ: UK
Founded: 2015
Subsector: Business banking
Last raise: $440m, February 2019, at a valuation of $2.8bn. Valuation shortly decreased to around $2bn at a secondary share sale in October 2020, then was bumped up again to $5bn by another secondary share sale in September 2021.
Unannounced round since then? No
Actively looking to raise? No
Layoffs? No, actively hiring
Profitable? Yes, since 2016. Pre-tax profits of £134.5m in 2021.
Scalable Capital
HQ: Germany
Founded: 2014
Subsector: Wealth management
Last raise: $180m Series E, June 2021.
Unannounced round since then? No
Actively looking to raise? No
Layoffs? No
Profitable? No, “focused on international growth” at the moment.
Zego
HQ: Germany
Founded: 2016
Subsector: Insurtech
Last raise: $150m Series C, March 2021.
Unannounced round since then? Yes — to be announced “in due course”.
Actively looking to raise? No. Runway extends to 2024, according to company.
Layoffs? Yes — laid off 17% of staff across all departments on July 11.
Profitable? Company declined to comment.
10x Banking
HQ: UK
Founded: 2016
Subsector: Banking
Last raise: $187m Series C, June 2021.
Unannounced round since then? No
Actively looking to raise? Declined to comment.
Layoffs? None publicly announced.
Profitable? Loss-making. Companies House records show losses stood at £43.7m for 2021.
ClearScore
HQ: UK
Founded: 2014
Subsector: Credit scoring
Last raise: $200m, June 2021.
Unnanounced round since then? No
Actively looking to raise? No
Layoffs? No, actively hiring for 26 roles.
Profitable? Yes, latest results for 2021 show an operating profit of £11m, according to the company.
Pollinate
HQ: UK
Founded: 2017
Subsector: Banking-as-a-Service
Last raise: $35.9m Series C, March 2021.
Unannounced round since then? According to sources familiar with the matter, Pollinate has raised a $20m Series C follow-on funding round this year, led by Canadian Imperial Bank of Commerce, and an additional $30m Series C+ funding round this year, from existing investors including Insight Partners, NatWest, NAB, EFM Asset Management and Fiserv.
Actively looking to raise? Company declined to comment.
Layoffs? Company declined to comment.
Profitable? Company declined to comment.
Raisin
HQ: Germany
Founded: 2012
Subsector: Wealth management
Last raise: $25m, July 2019
Unannounced round since then? Company declined to comment.
Actively looking to raise? Company declined to comment.
Layoffs? Company declined to comment.
Profitable? Loss-making, according to latest income statement. Losses stood at €19.2m for 2020.
ComplyAdvantage
HQ: UK
Founded: 2014
Subsector: Fraud prevention
Last raise: $20m Series C, May 2021.
Unannounced round since then? No
Actively looking to raise? No
Layoffs? No, hiring.
Profitable? Loss-making. Losses stood at £15.8m at latest filing for the year ending 31 March 2021.
Monument Bank
HQ: UK
Founded: 2016
Subsector: Retail banking
Last raise: £28m Series A, February 2021
Unannounced round since then? Company did not respond.
Actively looking to raise? Company did not respond.
Layoffs? None publicly announced.
Profitable? Losses stood at £5.7m in latest financial results for 2020, according to Companies House records.
Uncapped
HQ: UK
Founded: 2019
Subsector: Revenue-based financing
Last raise: $80m Series B, May 2021.
Internal round since then? Yes, unannounced round from internal and external investors.
Actively looking to raise? No
Layoffs? Yes — 26% of total headcount in April.
Profitable? The company tells Sifted it reached profitability a few months ago, but we won’t know for sure until its results this autumn.
Last raised in 2020
Onfido
HQ: UK
Tandem Bank
HQ: UK
Founded: 2013
Subsector: Retail banking
Last raise: $78m Series D, March 2020.
Unannounced round since then? “Pollen Street invested an undisclosed amount into Tandem in January 2022, acquiring a majority stake,” a spokesperson for the bank tells Sifted. Tandem used this fresh capital to acquire the lender Oplo.
Actively looking to raise? No
Layoffs? No — headcount grew c. 70% this year after Oplo acquisition.
Profitable? Yes, profits stood at £19.5m in its last company results, for 2020. “Tandem is on a clear path to delivering more than 20% return on equity across the business,” the spokesperson says.
Aidexa
HQ: Italy
Founded: 2020
Subsector: Business banking
Last raise: €45m Seed, November 2020
Unannounced round since then? Yes — €12m from existing investors in August 2022.
Actively looking to raise? No
Layoffs? No
Profitable? No
Habito
HQ: UK
Founded: 2016
Subsector: Mortgage lending
Last raise: £35m Series C, August 2020
Internal round since then? Company did not respond.
Actively looking to raise? Yes. Habito is reportedly in advanced talks for a fundraising round of more than £5m that would see its valuation drop to single-digit millions of dollars.
Layoffs? Yes, Habito has reportedly laid off some of its mortgage advisers and support staff. The company did not respond to request for comment.
Profitable? Losses stood at £13.3m for 2021.
GoHenry
HQ: UK
Founded: 2012
Subsector: Retail banking
Last raise: $40m, December 2020
Internal round since then? No
Actively looking to raise? The company told Sifted it’s “always exploring new opportunities that align with our growth plans”, but has no funding news to share to date.
Layoffs? No, has been growing team.
Profitable? No. Losses stood at £1.5m in FY20, according to Companies House.
Amy O’Brien is Sifted’s fintech reporter. She tweets from @Amy_EOBrien and writes our fintech newsletter — you can sign up here.
