By John Reynolds on Monday 6 December 2021
Klarna, N26, Revolut, Mollie and SumUp all undertook mega funding rounds in 2021.
2021 marked a bonanza funding year for European fintechs, with some eye-watering funding rounds signalling the industry's return to rude health following the Covid-hit 2020.
By the halfway point of 2021, Europe smashed the record for yearly investment into European fintechs, raising $11.75bn, trumping the previous record of $10.5bn raised in the first half of 2019 according to Dealroom figures.
Here AltFi charts five of the biggest raises in 2021 by European fintechs:
In March, Swedish buy now, pay later juggernaut Klarna raised a whopping $1bn. The bumper round was undertaken ahead of an expected blockbuster stock market listing, which could take place as early as 2022, according to CEO and co-founder Sebastian Siemiatkowski.
The $1bn funding meant that Klarna’s value nearly tripled to $31bn in less than six months and also that it retained its crown as the highest-valued private fintech in Europe.
It previously completed a $650m funding round in September 2020. Its $1bn round, which Klarna said was oversubscribed four times, featured a blend of new and existing investors.
N26 raised an eye-popping $900m at a more-than $9bn valuation, in October. One of the big beasts of the neobank movement, the Berlin-based startup, founded in 2013, now has around seven million clients.
The funding round was led by Third Point Ventures and Coatue Management while Dragoneer Investment Group and some of N26’s existing investors also took part in it.
N26 focus is on growing its business in central and Eastern Europe. It recently announced that it is pulling out of the US, which it said would allow to “sharpen its focus” on its European business.
The bank, which counts Peter Thiel’s Valar Ventures and Li Ka-shing’s Horizons Ventures among its backers, said that 500,000 customers in the US could use their accounts until the middle of January.
Last year, it also quit the UK. After the US exit, the online bank will now operate in 24 European countries. Speaking about the $900m funding, N26 said it “confirms that without a doubt, digital banking is here to stay”.
Dutch payments processing company Mollie closed a massive $800m funding round in June. The company, which was originally built by its founder while still living with his parents, said it would use the funds to help with overseas expansion, bolster its product offering, and grow its headcount.
The funding was led by Blackstone Growth with participation from EQT Growth, General Atlantic, HMI Capital, Alkeon Capital and TCV, which led the fintech’s Series B last year. The funding round propelled Mollie into becoming one of the most valuable startups in Europe with a value of $6.5bn.
The Amsterdam-based firm, unlike its US rivals, predominately focuses on transactions with small businesses in Europe. The firm was barely known before Covid but came to prominence on the back of a big shift towards online payments. It was founded by Dutch entrepreneur Adriaan Mol in 2004.
In June, Revolut, one of the poster children of the neobank movement, announced it had raised $800 million, valuing the company at $33bn, the most valuable fintech in the UK and one of the biggest privately backed startups in the world.
Revolut said the cash injection would be used to invest in its product suite and support the firm's expansion in the US and its entry to India and other international markets.
While Revolut has amassed millions of customers and is a recognised brand in Europe, its losses in 2020 of £207 million, were almost double the £106 million it lost in 2019. The $800m Series E funding round was co-led by Softbank Vision Fund 2 and Tiger Global. Last year, it closed a $580m round.
SumUp, the London-based card payments startup, landed €750m ($847m) in new funding in March. It said the funds would be used to power growth, as well as acquiring and supporting existing merchants in 33 markets across the world.
The funds are also being used to boost its product offering, potential acquisitions, as well as refinancing. The financing round, which SumUp said was oversubscribed, came from Goldman Sachs, Temasek, Bain Capital Credit, Crestline.
The funding came in the form of debt, as opposed to equity. Marc-Alexander Christ, one of SumUp’s co-founders told TechCrunch that the company opted for debt over equity because it could.
“We have very stable cash flow, which allows us to take on debt,” he said.