The fintech startup scene in Europe is in the midst of an identity crisis as it wrestles with U.S. influence. As failure still carries a greater stigma in Europe, too many European fintech companies are exiting to US firms and not becoming established global players.
With such impressive multiples, it’s not surprising that entrepreneurs and investors are being drawn to the sector. The danger of skyrocketing valuations in a fiercely acquisitive market is that fintech startups are founded with the express aim of an exit, rather than to establish the next fintech powerhouse. An E&Y review of company exits from 2009 to 2013 revealed there were no IPOs of UK-registered, venture-backed tech companies in that period. This has since changed with the Just Eat and King IPOs but the implication remains the same. Despite the availability of funds, fintech startups aren’t growing into the mid market and beyond.