The uncertainty generated by the COVID-19 crisis is evident in the economy and in the movements of investors. In a scenario where nobody knows exactly what is going to happen, money moves wisely. This has been noticed in the rounds of financing of fintech, one of the most attractive sectors for investment capital in recent years, which have fallen to their worst record in 3 years, according to data collected by the specialized media Sifted with data from Dealroom.
Specifically, the March data shows that investment in fintech stood at 338 million euros compared to the 825 million euros that moved the previous month, where it is worth highlighting the round of financing of Revolut that amounted to 500 million euros.
Experts, according to the media, consider that it could be an “anomaly” but believe that there may be a deeper fall. An idea that they maintain because Europe did not begin to feel the effects of the coronavirus until the middle of the month of March so that some of the rounds that were signed in that month would already be negotiated prior to the harshest impact of the pandemic that has come later.
In this sense, they point out that the fintech world may be about to face a period of “drought” of funds, according to a dozen sources consulted by Sifted.
What fintech are looking for financing
The new scenario that opens after the COVID 19 crisis may represent an opportunity for fintech companies that see how confinement changes the habits of users, which become more digital and increase the operations carried out through the internet, but they must first go through this critical moment where the financing tap seems to be closing and the liquidity of the companies will be decisive for their survival.
Some of the big fintech companies such as Monzo, Monese, Habito or Sweden’s Dream would be in talks for new rounds of financing, according to Sifted.
To which would be added other startups dedicated to the financial sector that are in their initial stage after having lifted their round of series A financing a year ago, such as Cleo, Canopy or Farewill.
Despite the critical moment they are experiencing, some investors are having a more long-term vision for what they see as the business of financial startups with attractiveness for the future. In this way, they point out that there are British venture capital funds such as Anthemis or Albion that have already closed several rounds.
Among European investors, Shifted highlights the case of the Swedish fund Sweden’s NFT, one of the most active in the fintech sector, considers that this sector will be one of the industries that will achieve greater success once the crisis is over.