Innovations in AI and embedded finance have sparked a recovery in fintech funding, according to Q3 figures compiled by Dealroom.
While European startup funding declined in Q3 2024, with a total of $11.3 billion raised—down 35% compared to the same period last year—fintech has bucked the trend, bouncing back from a downturn in 2023. Funding for fintech startups increased by 45% year-over-year in Q3 2024, reaching $1.6 billion.
AI technologies continue to drive growth in the European startup ecosystem. Generative AI, in particular, has garnered significant investor interest, raising $165 million across all sectors in Q3. So far this year, GenAI companies have attracted a total of $3.3 billion, which accounts for 8% of total European VC funding.
Although late-stage investments have seen a decline, early-stage and breakout-stage deals have remained stable throughout 2024. With an anticipated $33 billion in available capital by the end of the year, the ecosystem is well-positioned for continued momentum in 2025.
Remus Brett, general partner at LocalGlobe and Latitude, states: “Europe’s fintech sector is back in full force, as these funding figures confirm. Fintech startups, most of which are now AI-first, are driving further innovation in B2C and B2B markets, creating more opportunities in this $30 trillion sector. Additionally, the rise of ‘thoroughbred’ fintech companies with annual revenues exceeding $100 million is contributing to growth, job creation, and reshaping the landscape.”