EMEA

The UK accounted for nearly half of the region’s annual fintech investment ($9.9 billion), despite a drop from $13.6 billion
in 2023; UK-based investment was particularly soft in H2’24, accounting for only $2.3 billion of this total. The Middle East saw fintech investment swell from $1.2 billion to $2.2 billion year-over year, while fintech investment in France remained almost steady at $1.1 billion. Germany’s fintech market continued to struggle in 2024, attracting a ten-year low of $815 million in investment.

Key H2’24 highlights from the EMEA region include:

Strongest companies still raising funds

Within EMEA, strong businesses — ones turning a profit, or with proven business models and a strong growth trajectory — continued to attract investment in H2’24. Other startups moved to cut costs, adapt their business models, or pivot to better satisfy their investors. Not all companies were successful; In H2’24, the region saw a growing number of businesses sold or wound down.

Interest in AI solutions growing

AI continued to gain attention among fintech investors in the EMEA region, with some AI-focused fintechs attracting interest and investment — particularly from corporates. Concerns around how to effectively monetize AI however kept investment relatively conservative; to date, most AI-focused deals have focused on solutions aimed at driving back-office efficiencies.

Embedded payments not getting the traction seen elsewhere

While embedded payments solutions have seen a solid rise in interest from investors across much of the world, they have not gained the same traction in the EMEA region due to the legacy products on offer and consumer preferences for those methods, particularly the use of credit and debit cards.

Interest in B2B wealthtech picking up

During H2’24, the EMEA region saw a real dial up in interest for solutions focused on capital markets, such as trading platforms, post-trade settlement solutions, and anything to do with data-based tools and analytics. Fintech investors were particularly interested in B2B software solutions, in part because of their potential ability to generate more reliable cash flows, but also because such solutions can be easier to take across borders compared to consumer facing solutions.

Increasing number of secondary transactions

Given the dry exit environment over the last two years, there has been a growing number of secondary transactions as fintechs have reached profitability. This has been driven by long-standing investors wanting to liquidate some of their position and by companies looking to reward their early employees. Given the challenges facing the UK’s capital markets in particular, secondary transactions could remain quite robust in 2025.

Regulatory changes garnering attention

The evolving regulatory regimes in both the EU and the UK have made it challenging for startups, scaling fintechs, and other market participants, potentially driving them to focus more on compliance than on other activities. During H2’24, both the AI Act and the Markets in Crypto Assets (MiCA) regulation came into force in the EU.