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2021 was a remarkable year for the global FinTech market. The latest edition of our Pulse of FinTech shows: 5,684 deals drove global FinTech investments to over USD 210 billion (VC, PE, M&A), the second highest annual value ever. In addition, the range of FinTech solutions has increased significantly. In particular, cryptocurrencies, WealthTech services and cybersecurity have gained much interest. Optimism for FinTech investments is correspondingly high for the year 2022. Various sub-sectors are well positioned to develop further, while new innovations are constantly emerging.

European digital banks in the spotlight

Total FinTech investment in EMEA rose to a record USD 77 billion in 2021, driven in part by extensive M&A activity. The active investor base in the FinTech sector has expanded: An increasing number of business entities participated in financing rounds and was actively involved in acquisitions. Significant VC funding from neobanks should be highlighted. The main share related to established unicorns in Europe: Through a capital increase, N26 received USD 900 million and Revolut USD 800 million in the second half of 2021. However, the profitability of digital-first institutions remains challenging. In the longer term, this could lead to consolidation in the digital banking sector.

Germany: Cryptocurrencies and decentralised finance gain traction

In 2021, the trading platform for cryptocurrencies, Coinbase, founded its European headquarters in Germany. The business entity has also been authorised by the Federal Financial Supervisory Authority (BaFin) to hold crypto assets in custody. 2022 will be marked by increasing investments in DeFi applications and the development of a common regulatory framework for cryptocurrencies. Our Pulse authors expect dynamic growth in these segments.

You can download the 2/2021 edition of the Pulse of FinTech here.