European venture capital firms focus on fintechs
European venture capital firms continued to invest the majority of their funds into fintech in the first quarter of the year, according to new research.
Data from Dealroom, reported by Sifted, showed that $8.62bn (£6.63bn) was put into fintechs in the first three months of the year, making it the most lucrative sector — a trend seen in every quarter of 2021.
In contrast, $3.05bn was put into the second most attractive sector, health.
Overall, European venture capital firms invested $27.7bn across 1,800 funding rounds in tech firms across Europe in the first quarter of the year, up from $27.3bn from the previous quarter and $23.6bn in the first quarter of last year.
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Megarounds raised by some fintechs, such as Checkout.com, Qonto and Scalapay, have contributed to the $27.7bn total funding in the first quarter.
UK fintechs played a part in this funding, such as payments firm GoCardless raising $312m in February, and credit card start-up Yonder, which raised £20m in seed funding.
In the first quarter, 17 new unicorns in Europe were created and the UK’s tech sector continued to attract the most European venture capital funding.
Start-ups here raised $9.2bn in the first three months of the year, $1.7bn more than the first quarter of 2021.
Over in mainland Europe, French start-ups raised $5.4bn in venture capital funding in the first quarter, more than double the $2bn raised between January and March in 2021. This was the first time the country overtook Germany for funding in a single quarter since the first quarter of 2020.
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“If this continues at the same pace, the total amount of venture capital funding finding its way to Europe’s start-ups will surpass 2021’s figure — though with a lower number of overall deals suggesting the appetite for funding might be slowing,” industry body Fintech Alliance said in a blog on its website.
