Trouble ahead for European fintech valuations

Valuations for European venture-backed fintech startups have continued to grow, but recent markdowns indicate a downturn may be on the horizon.

A sharp increase in VC rounds in recent years has helped to push up valuations. As of the end of Q1, the median pre-money valuation for European fintech startups stood at €18.6 million, according to PitchBook data—a climb of 43.1% from 2022. So far this year, this increase has been consistent across all stages, with the exception of venture growth, which saw a decline of 59.7%.


However, there are signs that some startups may be overvalued. In recent months, several high-profile fintech companies have seen investors mark down their investments. In April, Schroders devalued its stake in Revolut by about 46%, while Allianz is understood to be selling its holding in N26 at a $3 billion valuation—a steep discount to the $9 billion price tag the company picked up in 2021.

European fintech has been significantly impacted by the VC downturn, with decreased consumer spending and rising interest rates putting pressure on dealmaking. The…

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