European banks are placing strategic bets in areas ranging from wealth management, lending, payments, regulatory technology, software, and blockchain.
In Q1’17, investments to European VC-backed fintech companies spiked to 73 investments worth $667M. At the current pace, total funding dollars to fintech companies based in Europe are on pace to surpass $2.6B and deals could surpass 2016’s total by 57%.
Europe is also home to major banks which continue to be active investors in fintech startups globally. Spain-based Banco Santander (and its venture arm Santander InnoVentures) took the top spot as the most active major European bank investing in fintech over the last 5-quarters. Major Europe-based banks have also participated in marque investments to unicorn fintech companies including Prosper Marketplace, Kabbage, and Symphony Communication Services Holdings.
We used the CB Insights database to analyze the private market fintech investment activity of the top European banks, by assets under management, from 2012-2017 year-to-date (as of 6/12/17). Banks’ venture arms are included in the analysis.
Note: France-based BPCE, Credit Mutuel Group, and UK-based Lloyds Banking Group have not made any equity investments to fintech startups during this period and are not pictured below.
Please click to enlarge.
- Ranked by the number of unique portfolio companies, the cohort’s three most active investors are Banco Santander, UBS, and Deutsche Bank, in that order.
- Banco Santander leads, with the most number of unique investments to fintech startups primarily through its venture arm Santander InnoVentures. The firm has made 13 investments to 12 unique fintech startups. The largest investment it participated in was a $135M Series E investment in Q3’15 to small business lender Kabbage, that also included participation from ING among other investors.
- Banco Santander’s investments are spread out among wealth management, lending, payments, regulatory technology, software, and blockchain.
- The company with the most co-investments from among this cohort is R3. R3 is a startup founded by a consortium of financial services firms and is developing use cases for blockchain applications. The company raised a $107M round of financing in Q2’17 that included participation from HSBC, Credit Suisse, Banco Santander, BBVA, Societe Generale, ING, Deutsche Bank, Royal Bank of Scotland, UBS, BNP Paribas, Barclays Bank, and UniCredit. The investment is the top investment among this cohort in 2017 YTD.
- Blockchain technology is the category with the most consistent investor presence. Nearly every European bank on our graphic has invested in a blockchain company. In addition to R3, Santander has also invested in Digital Asset Holdings, Ripple, and Elliptic. This is also the case among the most active US bank investing in fintech stratups.
- Approximately 70% of investments from the European banks above went to fintech companies based in the US.
- One of the top investments in 2017 YTD went to Symphony Communication Services Holdings, or Symphony, a communications and collaboration platform for financial services professionals. Symphony raised a $63M Series C in Q2’17 that included participation from BNP Paribas among other top firms. The investment valued the company at $1B and made Symphony a unicorn ($1B+ valuation).
Looking for more fintech investment data and analytics? Sign up free for the CB Insights Venture Capital Database.