The fintech sector shows signs of maturity in 2024, with fundraisings up 20% to €1.3B, led by insurtech (€440M) and B2B sectors like embedded finance and cybersecurity (€700M). While early-stage funding declined, mega-deals surged, with €745M from top 10 transactions (+63% vs. 2023). M&A reached 54 deals, while failure cases increased, reflecting a selective but evolving market.
The Fintech Observatory published its study on fintech trends in France and around the world on Thursday, December 12th - with its partners KPMG, Mastercard and eToro, and more than 30 expert contributors from Fintech, Banking, Insurance, Investment and Financial Services Transformation.
With a job pool of 36,000 employees, 54 M&A transactions carried out over the year and 1.3 billion euros in funds raised through 92 transactions (10.8 billion euros since 2010), the sector displays a certain solidity. A certain solidity that deplores "only" 19 cessations of activity. Proof that, a little over ten years after its advent, fintech has established itself as a true vertical of the economy?
A sector which is also extremely regulated and which should see its share of new provisions with the entry into force of Mica, Dora.
The sector, which experienced a rather turbulent year in 2023 with funding contracting by 56%, is now seeing fundraisings increase again (+20%) with 1.3 billion in funds raised in 2024 (1.1 in 2023).
Still as selective, investors have limited movements with 92 fundraisings (compared to 140 in 2023). At the top of the most supported sectors? BtoB professions such as embedded finance, cybersecurity and BtoB insurtech. On the employment side, the workforce in France increased by 10% over the period.
A return of international investors which translates in 2024 into 3 mega-deals with Alan in insurtech and €173M, Akur8 in insurtech and €108M, and Pigment in embedded finance and €134M.
Still far from the 7 mega-deals observed in 2022, this year's performances far exceed those of 2023 which had only seen one mega-deal with Ledger (€100M). Thus, the 10 largest fundraisings in 2024 reach €745M, 63% higher than 2023 (€458M). As a reminder, these totaled 13.0 billion in 2022 and 19.0 billion in 2021.
The average ticket is up this year to 14.2 million euros per transaction (+84% compared to 2023), thus approaching 2022 levels. It is driven by 3 transactions >100M€ +4 transactions >50M€.
It was also much more difficult this year to raise funds in early stage, since the significant reduction in the number of operations, from 140 in 2023 to 92 in 2024, comes mainly from the smallest tickets:
There were 52 fundraisings up to €5M (compared to 100 in 2023), 23 fundraisings between €5 and €20M (compared to 25 in 2023), 10 fundraisings between €20 and €50M (13 in 2023) and 7 fundraisings >€50M (compared to 2 in 2023). Insurtech made its comeback after 12 to 18 months of relative calm by raising €440M this year with fundraisings mainly from Alan, Akur8 and Neat.
BB businesses continue to attract investors' attention through embedded finance, cybersecurity or ESG and capture nearly €700M: we observed the fundraisings of Pigment (€134M), Zama (€68M), Filigran (€50M), Greenly (€50M), Morpho Labs (€46M), Agicap (€45M), or Pennylane (€40M).
Then comes investment, which is becoming attractive again with two years of rising interest rates with Flowdesk (€46M) or Ramify(€11M). A radical change in trend for payment, which was much less popular with investors this year, with less than €25M in funds raised only.
An M&A at its highest, with 54 transactions recorded over the year, in a similar range to the 50 to 60 annual transactions recorded in 2022 and 2023, together contributing to 3/4 of the 227 transactions carried out since 2016 in Fintech in France. The deals were mainly concluded in number for purchase (40%) by Fintech players and Start-ups to accelerate their expansion abroad or enrich their range of services, then at 37% by Corporates wishing to diversify their activities, and finally at 23% by funds as part of majority transactions.
Three emblematic operations of the year concern embedded finance to extend the value chain either on the banking side or on the accounting tech side: Regate was acquired by Qonto, the BPCE group acquired Ipaidthat and the Danish publisher Ageras is currently buying Shine from SG .
Difficulty situations (safeguard procedures, receiverships and cessations of activity) continued to increase in 2024 with 19 new cases of failure. These companies had cumulatively raised €125 million, of which the main one, October , accounts for €54 million, followed by Dreamquark for €17 million. In total, 100 companies have failed since 2016 and had raised a cumulative €0.5 billion.
At this stage, this only represents 4% of the total funds raised in fintech, a very small amount, and this is part of the risk of investing in innovation. This trend has however accelerated this year, which accounted for 20% in number and 30% in value.
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