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- We asked nine tech investors to tell us which European fintechs will boom in 2019.
- Fintech is Europe’s hottest startup market, with companies raising more than $9 billion in 2019, according to industry figures.
- The companies cover a wide variety of products and services across the financial industry as digital disruption reshapes everything from banking to insurance.
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Business Insider spoke with some of the most prominent voices in European venture capital to pick out the companies in the contintent’s financial technology industry they think will be at the forefront of 2020.
Fintech is the continent’s hottest startup sector, with companies in the market raising more than $9 billion in venture capital in 2019, according to figures from Atomico.
The finance startups that have hit unicorn status to date have mostly been challenger or neo-banks which provide payment services, particularly related to foreign exchange and low-fee transfers. Familiar European firms include Monzo, TransferWise, Revolut, and Starling Bank.
But there are major new trends in the market, such as open banking, the rise of compliance, and a big move towards insurance technology.
Insurtech is one of the biggest verticals in this list with a number of companies looking to disrupt parts of what is still a fairly traditional industry.
Business Insider asked some of Europe’s leading VCs in the fintech space to provide one company from within their portfolio and one from outside that they believe will be one to watch in 2020.
Here are the fintechs that VCs think will blow up in 2019, in no particular order.
Cited by these VCs:Tara Reeves, partner at OMERS Ventures.
In the OMERS portfolio?Yes.
Total raised:$268.5 million
What it does:Wefox is an insurance platform based in Germany.
Why it’s hot in 2020:“The platform connects brokers, insurers and customers. Their suite of broker tools allows independent brokers to offer a digital experience and the platform allows insurers to innovate on product rapidly, both to the benefit of customers,” Reeves said. “It’s a real win-win-win, which has helped them grow rapidly.”
You can read more about Wefox here.
Cited by these VCs:Tara Reeves, partner OMERS Ventures.
In the OMERS portfolio?No.
Total raised:$23.3 million
What it does:Moneybox is an investment platform based in London that allows users to invest in a number of cash-saving options.
Why it’s hot in 2020:Moneybox is “quietly amassing hundreds of thousands of customers and millions of AUM [assets under management] with their industry-beating products, jargon-free investment offering, low fees and behavioral nudges,” Reeves said. “It could be the mobile-first Hargreaves Landsdowne 10 years from now.”
Cited by these VCs:Rob Moffat, partner at Balderton Capital
In the Balderton portfolio?Yes.
Total raised:$78 million
What it does:London-based Wagestream helps employees access their earnings earlier in the month rather than rely on payday lenders or take on expensive credit.
Why it’s hot in 2020: “In 2020 employers will become more expected to take responsibility for the financial wellness of their employees. The product that grabbed the most attention in 2019 was income streaming: the option to get paid while you earn rather than waiting for payday or taking expensive credit,” said Moffat.
“This sector took off in the US in 2019 and the UK is picking up with the two main players being Wagestream and Salary Finance, continental Europe still early but expected to move quickly in 2020. However the scope here is much broader: financial coaching, budgeting, saving, investing, pensions, life insurance.”
Cited by these VCs:Rob Moffat, partner at Balderton Capital.
In the Balderton portfolio?No.
Total raised:$28 million
What it does:Berlin-based Moonfare offers affluent customers the ability to invest directly into top quartile private equity and VC funds and in 2019 they went above $120 million AUM.
Why it’s hot in 2020: “I expect this to increase rapidly due to continued strong appetite from investors for exposure to private equity, but wishing to invest directly at lowest possible cost (as increasing numbers of them already do for public equity),” said Moffat.
Cited by these VCs: Tom Mendoza, deal partner at EQT Ventures.
In the EQT Ventures portfolio?Yes.
Total raised:$41.4 million
What it does:Cytora was founded and spun out of the University of Cambridge in 2014 by a team of machine-learning scientists, data engineers and strategists. The company has developed an AI-powered solution for commercial insurance underwriting.
Why it’s hot in 2020: “We invested in Cytora because the insurance industry’s digital transformation needs to be seriously accelerated,” said Mendoza.
“Insurance is vital to the economy, giving businesses the confidence to realise their ambitions in the face of uncertainty, but the underlying systems that insurance is built on are broken. Changing core underwriting processes that have been set for decades is hard, but we believe the Cytora team has the ambition, grit, and drive to do it.”
Cited by these VCs:Harry Nelis, partner at Accel.
In the Accel portfolio?Yes.
Total raised:$407.7 million
What it does:WorldRemit allows people to send small amounts of money home to their families, no matter where in the world, at very low cost.
Why it’s hot in 2020:“The company has four million customers and has a net commission run rate of $200 million, growing more than 50% year over year,” said Nelis. “The company improves the lives of millions of people by making redundant the cumbersome and expensive process of making cash transactions at corner stores.”
Cited by these VCs:Harry Nelis, Partner at Accel.
In the Accel portfolio?No.
Total raised: $336.9 million
What it does:Revolut is another of the UK’s leading neo banks replete with currency services at realtime exchange rates and access to cryptocurrency markets.
Why it’s hot in 2020:Revolut deserves credit for“building a consumer financial services company at such enormous speed,” according to Nelis. The company has been expanding internationally in recent years and claims to have six million customers.
Cited by these VCs:Jeppe Zink, partner at Northzone.
In the Northzone portfolio?Yes.
Total raised: $13 million
What it does:Anyfin helps borrowers lower their monthly costs, which are often based on high interest rates and hidden fees. They do that with the help of technology, by skipping expensive middle-men and not taking excessive administration fees.
Why it’s hot in 2020:“Anyfin’s founders have extensive experience in consumer finance, assessing credit risk and technology, having previously held leading roles at some of Sweden’s top tech companies, including iZettle, Klarna and Spotify,” Zink said. “The company’s intuitive customer-facing product is addressing a real pain point and has been underpinning the company’s high growth and strong performance since our investment.”
Cited by these VCs:Jeppe Zink, Partner at Northzone.
In the Northzone portfolio?No.
Total raised:$7 million
What it does:Roger.ai is designed to give you and your team time back by getting all the boring daily financial work done through automated workflows for things like bill payments, approvals, compliance and expenses.
Why it’s hot in 2020: “Roger.ai claims to cut the time businesses spend on day-to-day financial processes by as much as 80%, Roger works on top of existing accounting software to automate financial processes, such as paying bills, approvals, receipt scanning, compliance and bookkeeping,” said Zink. “This is achieved via ‘simple workflows’ that the Denmark and US-based company says anyone can set up and manage.”
Cited by these VCs:Evgenia Plotnikova, partner at Dawn Capital.
In the Dawn portfolio?Yes.
Total raised:$83.2 million
What it does:Soldo provides expense management software to businesses large and small in Europe and is headed by serial entrepreneur Carlo Gualandri.
Why it’s hot in 2020: “With Brexit coming up and the rise of distributed work among small businesses, Soldo stands out with an e-money license in both the UK and Europe and provides businesses a corporate credit card for everyone, not the bigwigs in the C-suite,” said Plotnikova.
“Soldo has a presence in the UK, Italy and Ireland already and is redefining the business spend category from scratch, solving the pain points of every stakeholder at no one’s expense and is putting trust, ease and compliance at its core.”
Cited by these VCs:Evgenia Plotnikova, Partner at Dawn Capital.
In the Dawn portfolio?No.
Total raised:$105.6 million
What it does:Founded in 2012 in Stockholm, Tink is a cloud-based platform that provides the infrastructure and data products that enables banks to create next-generation banking services.
Why it’s hot in 2020: “With viable commercial models already availing of open banking and the access of financial information through APIs, tech has successfully caught up with earlier regulatory changes,” said Plotnikova. “In 2020 we will see broader Open Finance, with transparency across every sector of Financial Interactions, from pensions to insurance.”
Cited by these VCs:Tom Mendoza, EQT Ventures
In the EQT Ventures portfolio?No.
Total raised:$47 million
What it does:Berlin-based Mambu provides SaaS banking platforms through what it calls “composable banking.”
Why it’s hot in 2020:“Mambu is one of the leading next-gen core banking platforms and there is a major shift to replace these core banking platforms because of the high costs of running legacy cores by neo-banks,” Mendoza said.
Cited by these VCs:Ruth Foxe Blader, partner at Anthemis Capital.
In the Anthemis portfolio?Yes.
Total raised:$6 million
What it does:Stable is a price insurance platform that helps businesses around the world manage their exposure to volatile commodity prices.
Why it’s hot in 2020: “I think 2020 will be a breakthrough year for the insurtech sub-sector, as a few of these businesses begin to demonstrate their ability to scale,” said Foxe Blader. “From our portfolio, I’m very excited to see what Stable do as they emerge from stealth mode and begin to address much larger customer pools on a pan-European stage.”
Cited by these VCs:Reshma Sohoni, Seedcamp.
In the Seedcamp portfolio?Yes.
Total raised:$3.9 million
What it does:London-based Griffin provides access to banking infrastructure for fintech startups through an API platform.
Why it’s hot in 2020:“They’re building a fully regulated banking platform for the next wave of fintech companies to be able to build on top of. I think there’s huge opportunity for platforms such as Griffin who are providing essential access to banking infrastructure which is critical for fintech startups,” said Sohoni. “Due to legal and regulatory restrictions in the UK, companies have traditionally been forced to partner with banks — resulting in often lengthy and expensive onboarding processes.”
Cited by these VCs:Mark Goldberg, partner at Index Ventures.
In the Index portfolio?Yes.
Total raised:$90.4 million
What it does:Paris-based Spendesk provides companies with expense-management services and competes with other providers like Soldo and Pleo.
Why it’s hot in 2020:“Small businesses in France have been signing up in droves to Spendesk’s spend management platform, and the company is expanding quickly across Europe on the back of last year’s $35M funding,” said Goldberg. “Both finance teams and employees love the simplicity with which Spendesk manages all the hassle of spending at work.”
You can read more about Spendesk’s recent funding round here.