VC funding to fintech companies in Europe spiked in Q1, while US deal activity cooled, according to the latest figures from CB Insights.
Amid upcoming legisltation that could open the door for fintech companies to challenge incumbent banks, Europe saw Q1 funding to VC-backed fintech companies jump 222% sequentially. The spike in deal activity puts total funding dollars on pace to surpass $2.6 billion at the current run rate, the report states.
In total, fintech startups in Europe raised $667 million across 73 deals in Q1. Compared to the same quarter last year, Europe fintech funding rose 121%, while deals rose 38%.
Spurred by big dollar bets on Atom Bank and Funding Circle, the UK enjoyed a 57% jump in fintech deal activity for the quarter, re-affirming Britain's status as Europe's top fintech market despite the recent triggering of Article 50 and a planned withdrawal from the European Union.
The burst of activity in Europe is in sharp contrast to a more subdued outlook in US markets, where deal activity dropped nine percent sequentially and funding fell eight percent. CB Insights estimates that if the lacklustre pace of investment in Q1 continues throughout the year, funding to VC-backed fintech companies would drop 20% from 2016's dollar total.