France and Sweden's fintech ambitions get Brexit boost

France and Sweden's fintech ambitions get Brexit boost

The UK's divorce from the EU has led to France and Sweden gaining a larger share of the number of fintech deals done within the Union, according to the research firm CBInsights.

The survey, European Fintech Trends, showed the difference in the number and regional share of fintech deals among European countries and while the UK still leads the way with a 34% share, it has fallen from the 45% it enjoyed back in 2014.

France and Sweden have been the two biggest beneficaries from this drop, experiencing boosts of five and three percentage points respectively - France now has 11% of the deals while Sweden has 12%. 

That said, the overall capital raised by fintech-related ventures has increased in the same period. So far in 2017, venture capitalists have invested $2.6bn, surpassing the previous annual record and more than doubling the total raised in 2013. CBInsights forecasts that the 2017 total will exceed $4bn by year-end.

Nevertheless, the concern is that the UK is seeing its influence in the European fintech marekt diminish as a result of Brexit. A number of UK-based startups have highlighted the restricted access to the European Investment Fund, a large, EU-run source of venture capital, as one of the negative impacts from Brexit along with potential difficulties in recruiting skilled tech staff from overseas. 

The report also highlights a number of other fintech trends, such as the rise of insurtech where financing increased from $13m in 2015 to $129m in 2016 and looks set to rise further this year.

The report also showcases the growth of blockchain projects, many of them led by national governments in Sweden, ther UK, Ukraine and Estonia. Meanwhile, for private blockchain projects, Switzerland is emerging as a hub of choice within Europe. 

"Switzerland has proved itself a regulatory haven for blockchain startups, while the technology’s decentralized funding mechanism lends itself to borderless innovation," states the report.

 

 

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