After more than a decade of growth and numerous successfully funded companies, European fintech has transitioned from a startup narrative. The stage is now set for a wave of strategic acquisitions in the next two to three years, according to Victor Basta, managing partner at Artis Partners.
Basta explains that a growing number of mid-sized European fintech firms are now not only profitable and strategically significant, but also positioned for high-value exits—though they are not poised for breakout IPOs. “Given that investors have supported these companies for nearly a decade, we anticipate that up to a third could be acquired in the coming years. This will realign key sectors of European fintech, centering around fewer, broader platform players, including both international strategics and independent firms that can scale beyond $1 billion valuations,” he notes.
The focus of this consolidation wave will be on Europe’s ‘maturing middle tier’—companies generating up to £50 million in revenue, experiencing annual growth rates of 20-50%, and which are already profitable or at break-even following cost-cutting measures and funding limitations.
Basta points out that these firms face significant commercial challenges. “Increasing revenue from £5 million to £10 million is manageable, but scaling from £100 million to £200 million is much more complex, especially against established fintechs and legacy players. Growth becomes more costly, prompting a shift in focus toward strategic mergers and acquisitions. Additionally, with a significant portion of capital flowing to native AI startups, many of these fintechs find it increasingly difficult to secure substantial funding,” he explains. “Most hold greater strategic value than just financial metrics.”
Recent notable acquisitions include Thomson Reuters’ $800 million purchase of Pagero, along with Freetrade’s sale to IG Group and Ravelin’s sale to Worldpay—transactions that Artis advised on.
Basta indicates that more deals are on the horizon, especially as investors seek to realize the value of their investments as they approach the end of their fund cycles. “This isn’t an isolated trend,” he adds. “We’re observing this shift across payments, trading, and regtech.”
He emphasizes that this moment represents a pivotal point for the European VC industry that has supported fintech since its inception. “These exits will shape the future success of European funds.”