Unlocking Europe’s Fintech Potential: Building Better Public Markets
Explore how Europe’s fintech sector can thrive by strengthening public markets, avoiding bubbles, and fostering sustainable scale-up capital to compete globally in 2025 and beyond.
Key Takeaways
- Europe’s fintech funding in 2025 is steady, not bubble-driven
- Public markets in Europe need deeper, more flexible structures
- Mid-market fintechs face capital shortages despite strong quality
- US fintech benefits from broader institutional investor pools
- Europe’s exit market excels in mid-cap buyouts and strategic sales
Europe’s fintech scene is buzzing with innovation and ambition. Home to over 9,000 fintechs, including stars like Wise, Klarna, and Revolut, the continent is carving its niche in global financial technology. Yet, beneath the surface of rapid growth lies a challenge: building public markets that truly support sustainable scale-ups.
The fintech funding landscape in Europe tells a story of resilience rather than frenzy. After a 2021 spike fueled by a liquidity-driven bubble, 2025 shows a steadier path with €3.6 billion raised in the first half—tracking closer to 2019 levels. But this calm reveals cracks: capital concentrates in a few giants, leaving many promising mid-market firms scrambling.
This article dives into why Europe must stop chasing bubbles and instead focus on crafting better public markets. We’ll explore the current funding dynamics, the risks of hype-driven growth, and actionable steps to unlock Europe’s fintech potential for the long haul.
Understanding Europe’s Fintech Landscape
Europe hosts more than 9,000 fintech companies, from payment giants like Wise and Klarna to banking innovators such as Revolut and Monzo. This vibrant ecosystem is a powerhouse, yet it operates under different rhythms than the US, which boasts over 13,000 fintechs including Stripe and PayPal.
In 2025, European fintechs raised €3.6 billion in the first half, a 23% increase from 2024, signaling steady growth rather than a frenzy. Contrast this with 2021’s €16 billion peak—a liquidity-driven bubble that experts now view as an anomaly. The current funding pace aligns more with 2019, emphasizing stamina over sprinting.
But here’s the catch: nearly half of 2025’s funding went to just two deals, Rapyd and FNZ. This concentration leaves many promising mid-market companies in the shadows, struggling for capital. Unlike the US, where funding spreads across hundreds of deals, Europe’s capital is clustered, reflecting shallower late-stage markets and fewer institutional investors. This dynamic shapes the fintech journey, demanding a rethink of how Europe supports its innovators.
Avoiding the Bubble Trap
Remember 2021? That year felt like a sugar rush for European fintech—record venture investments flooded the market, inflating valuations and sparking a frenzy. But bubbles burst, and the aftermath left many startups gasping for air.
Today, Europe is steering clear of that temptation. The focus has shifted to building companies with solid revenue streams and sustainable business models. Chasing another bubble risks misallocating capital to hype rather than substance, setting the stage for painful corrections.
This cautious approach isn’t just prudent; it’s strategic. By resisting the siren call of easy money, European fintechs are crafting sturdier foundations. The lesson? Growth fueled by real value beats flashy valuations every time. It’s about endurance, not fireworks.
Building Stronger Public Markets
Public markets are the launchpads where fintechs transform from promising startups into global champions. Europe’s challenge? Its public market ecosystem is less mature than the US, where exchanges like NASDAQ provide deep pools of capital and visibility.
Without robust public markets, European fintechs often face a tough choice: stay private longer, seek foreign listings, or accept acquisition offers. This dynamic risks "innovation leakage," where homegrown talent and value flow overseas.
Europe needs exchanges that offer flexibility and scale, allowing companies to list locally without jumping through hoops. Harmonized regulations like MiCA and PSD3 are steps forward, but more is needed to create a predictable, transparent environment that attracts both companies and investors. The goal is clear: build public markets that fuel sustainable fintech growth and global competitiveness.
Supporting Mid-Market Fintechs
Mid-market fintechs are the unsung heroes of Europe’s tech story. These companies, often generating revenues between €100 million and €500 million, deliver consistent innovation and jobs but face a persistent capital crunch.
In 2025, funding skewed heavily toward a handful of large deals, leaving many mid-sized firms scrambling. This isn’t due to a lack of quality—Europe’s fintech pipeline is rich—but because financial structures supporting this segment are still evolving.
Private equity plays a bigger role in Europe’s mid-cap exits than in the US, accounting for 40% of technology exits in the €100 million-€500 million range. This resilience shows the potential of a vibrant mid-market. To unlock it fully, Europe needs more institutional investors like pension funds and sovereign wealth funds to step in, bridging the gap between venture capital and growth equity.
Charting Europe’s Fintech Future
Europe faces a €300 billion backlog of tech companies eager to list. Clearing this treasure trove won’t happen overnight—at 2024’s pace, it would take nearly a decade. The bar for IPOs is high, with sub-€500 million revenue listings nearly extinct.
Yet, this challenge is also an opportunity. Europe’s exit market shines in mid-cap buyouts and strategic acquisitions, offering steady outcomes without relying solely on IPOs. The continent’s fintechs don’t all need to chase €500 million+ revenue; a €50 million ARR business can be a winner with the right capital environment.
The path forward involves exchanges offering more flexible listing options, a deeper mid-cap investor base, and institutional players embracing domestic tech IPOs. Europe’s fintech story isn’t about bubbles or backlogs—it’s about building markets that let companies scale sustainably, list locally, and thrive globally.
Long Story Short
Europe’s fintech future hinges on building public markets that are deep, flexible, and welcoming to a broad range of companies—not just the giants. The continent’s strength lies in its sturdy, capital-efficient scale-ups, but without better late-stage funding and exit options, many risk stalling or heading overseas. By fostering stronger mid-market investor bases, harmonizing regulations, and encouraging institutional support, Europe can unlock a €300 billion backlog of tech companies eager to list locally. This isn’t about chasing the next bubble but nurturing sustainable growth that benefits founders, investors, and society alike. The relief of a thriving, homegrown fintech ecosystem is within reach. Europe’s fintechs can scale, list, and compete globally—if public markets evolve from bottlenecks into launchpads.