Digital lending (2024)

These startups are on the money

Last updated: 28 Nov 2024

Market 101

When interest rates started to rise at the tail end of 2022, digital lending fintechs found themselves in a Catch-22. As fintechs saw an increase in income from lending, the cost of borrowing went up, decreasing the number of potential borrowers.

That can be particularly seen in the 2023 revenue profiles of Europe’s fintechs. For instance, while lending made up the majority of neobank Zopa’s revenue last year, CEO Jaidev Janardana told Sifted in June that once interest rates start to come down again more borrowers will start to return to the platform.

“We’ve had this behaviour where some of our best borrowers have postponed their discretionary spending,” he said. “If rates were to come down, they would come back into the market which would help our business.” In the months after his comments, interest rates in the UK and Europe started to come down from historic highs and are now at 4.75% and 3.25% respectively.

Continued uneasiness about the long-term financial sustainability of lending fintechs may have translated into the levels of VC funding for the subsector. European digital lending startups have raised $549.3m in funding so far this year — a close to 50% drop in funding year-on-year.

A huge chunk of that came from consumer lender Abound, which raised a £400m Series B in May this year. Other banner fundraises this year include climate fintech Cloover’s €105m seed round in May and January’s $48m Series B round for UK-based Bumper, which helps drivers split repair costs into interest-free payments.

This year has also seen some of Europe’s brand-name lending fintechs mature. BNPL lenders like Zilch say they are set to report full-year profitability for 2024. Earlier this month, Klarna also filed for an IPO in the US after it posted a H1 2024 adjusted operating profit of €52.7m.

Europe’s big-name challenger banks leaving their mark in lending may have also put off fledgling fintechs from building in digital lending. Sifted identified 65 pre-seed to Series A startups in Europe building in the vertical. In comparison, there were 104 early-stage companies in the CFO tech stack and 76 in the digital banking sector.

Early stage market map

Deals

Key facts

$2.1bn

is how much climate fintechs have raises in Europe this year

£2.3bn

is the size of UK neobank Starling's loanbook

$549.3m

is how much VC financing has gone to European digital lenders so far in 2024

Startups tracked by Sifted

Sifted take

The new normal of high interest rates may have put lending into the spotlight but VC investors aren’t exactly showing love for the sector. No one expects a return to 2019 levels of funding — when digital lending startup raised more than $3.1bn in Europe — on the horizon anytime soon. Still, that’s not to say there aren’t any green shoots for the sector. Many of the lending players that rose in the 2010s such as Klarna and Zilch are reaching maturity and there’s also activity in more niche markets, such as lending fintechs catering to green energy.

Rising stars

kennek Solutions

Infrastructure providers

Total funding

€16.6m

London, UK
2021

A vertically integrated solution that enables every lender and loan investor to operate smartly and cost-efficiently with funding from ff Venture Capital, Plug and Play, DFF Ventures, HV Capital and Albion Capital.

Round

Seed

Valuation

Undisclosed


Date

2023

Size

€11.3m

Opna

Business loans

Total funding

€5.9m

London, UK
2021

Backed by investors such MCJ Collective, Atomico and Pale Blue Dot, Opna helps carbon removal project developers secure financing from buyers.

Round

Seed

Valuation

Undisclosed


Date

2023

Size

€5.9m

Early stage startups to watch

Acre

London, United Kingdom
2018
Early VC

13.2m

7.4m

-

AlbaCo

East Kilbride, United Kingdom
2018
Series A

6m

6m

-

Algoan

Paris, France
2018
Early VC

-

-

-

Altitude

Finland
2021
Seed

5.5m

3.6m

-

Ayan Capital

London, United Kingdom
2023
Series A

5.9m

3.4m

24.4m

Banxware

Berlin, Germany
2020
Series A

29m

15m

-

Belong

London, United Kingdom
2024
Pre-seed

3.5m

3.5m

-

Bislab

Oslo, Norway
2022
Seed

1.7m

1.7m

-

Bloom

London, United Kingdom
2019
Series A

360m

360m

-

BridgeFund

Amsterdam, Netherlands
2018
Early VC

21m

20m

-

Cloover

Stockholms kommun, Sweden
2022
Seed

5m

5m

-

CreditLogic

Dublin, Ireland
2019
Debt

8m

3.5m

-

Debite

London, United Kingdom
2021
Seed

1.5m

1.5m

-

Defacto

Paris, France
2021
Series A

221m

10m

-

doddl

Dublin, Ireland
2019
Seed

1m

1m

-

Euler XYZ

London, United Kingdom
2020
Early VC

36.4m

29.1m

-

faire.ai

Milan, Italy
2020
Seed

4.5m

3m

-

Ferovinum

London, United Kingdom
2018
Series A

27.8m

20.8m

-

FinMatch AG

Stuttgart, Germany
2018
Seed

1.5m

1.5m

-

finmid

Berlin, Germany
2021
Series A

35m

23m

100m

Fintern

London, UK
2020
Series B

1.6b

923m

-

Flowpay

Prague, Czech Republic
2021
Seed

7.8m

2.1m

-

Fulfin

Munich, Germany
2018
Late VC

19.3m

6.6m

-

Gilion

Stockholms kommun, Sweden
2021
Early VC

34.1m

10m

-

HeavyFinance

Vilnius, Lithuania
2020
Angel

5.2m

1m

-

Hero

Paris, France
2021
Series A

18.3m

11.3m

-

Hydr

Manchester, United Kingdom
2020
Seed

400k

400k

-

HYPOTEQ AG

Zug, Switzerland
2020
Seed

830k

830k

-

Incredible

London, United Kingdom
2022
Seed

910k

910k

-

Jeff

Riga, Latvia
2020
Seed

4.5m

1.8m

-

kennek Solutions

London, United Kingdom
2021
Seed

16.6m

11.4m

-

Kintai

Barcelona, Spain
2021
Seed

1.3m

1.3m

-

Krea

Stockholms kommun, Sweden
2018
Seed

770k

770k

-

Kredium

Belgrade, Serbia
2020
Seed

-

-

-

Lemonero

Prague, Czech Republic
2019
Seed

6m

4m

-

Levenue

Breda, Netherlands
2021
Series A

8.5m

8m

-

Mast

London, United Kingdom
2020
Seed

2.5m

790k

-

Mifundo

Tallinn, Estonia
2022
Seed

11.2m

10m

-

Moneybounce

Paris, France
2019
Seed

1.5m

1m

-

Monthio

Copenhagen, Denmark
2018
Series A

12.1m

11.4m

-

MQube

Guildford, United Kingdom
2018
Series A

21.4m

10.8m

-

neoshare

Munich, Germany
2019
Early VC

19m

19m

-

Noggin HQ

Newcastle upon Tyne, United Kingdom
2021
Seed

920k

850k

-

Nordstreet

Vilnius, Lithuania
2018
Seed

310k

310k

-

Oper Credits

Antwerp , Belgium
2019
Series A

14.4m

11m

-

Opna

London, United Kingdom
2022
Seed

5.9m

5.9m

-

Perenna

London, United Kingdom
2018
Early VC

83.6m

47.3m

-

Prestalo

Barcelona, Spain
2018
Seed

1.5m

1m

20m

Prestatech

Berlin, Germany
2021
Seed

8m

4m

23m

Qomodo

Milan, Italy
2022
Pre-seed

4.5m

4.5m

-

RE-Lender

Milan, Italy
2019
Series A

1m

1m

12.1m

re:cap

Berlin, Germany
2021
Series A

38.3m

13.3m

-

RUUF

Istanbul, Türkiye
2020
Seed

450k

360k

-

SAPI

London, United Kingdom
2018
Early VC

9m

9m

-

smeGo

Vilnius, Lithuania
2016
Bootstrapped

5m

-

-

Softloans

Vilnius, Lithuania
2022
Pre-seed

1.1m

1m

5m

Sprive

London, United Kingdom
2021
Pre-seed

2.4m

1.7m

-

Swoop Funding

London, United Kingdom
2018
Series A

21.9m

6.5m

32.4m

TeklifimGelsin

Çankaya, Türkiye
2020
Early VC

2.2m

-

-

Tembo Money

London, UK
2020
Series A

9m

6m

-

TRIOTECA

Barcelona, Spain
2018
Seed

2.4m

1.4m

-

Two

Oslo, Norway
2020
Series A

28.8m

18m

-

Viceversa

Milan, Italy
2021
Series A

33m

10m

-

Virgil

Paris, France
2018
Early VC

20.1m

15m

-

Wollit

London, United Kingdom
2019
Seed

4.8m

3.6m

-

Europe’s success stories

Who early stage startups are up against

(Pre-)Seed

SeriesA

SeriesB

SeriesC

SeriesD+

IPO/Exit

London-based bank for entrepreneurs which provides accessible debt finance and counts SoftBank and Tech Nation, among others, on its cap table.

(Pre-)Seed

SeriesA

SeriesB

SeriesC

SeriesD+

IPO/Exit

Citi and GSR Ventures-backed lending platform that aims to increase access to affordable loans.

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