Total investment fell by 90% year-on-year for those six months, from €212m to just €22m, according to the annual State of European Fintech report published by Finch Capital.
,While venture and buyout capital in Ireland remained broadly the same, there was a 40% reduction in average fund sizes.
,The largest deal done in H1 was a €10m funding round for Zartis, a Cork-based software consulting firm.
,it is also worth adding that the report excludes the acquisition of Dublin-based SoftCo by private equity firm Keensight Capital in a deal that was esitmated to be worth than €100m.
,The report comes a year after Irish lobby group Financial Services Ireland called for more state support for the country’s fintech sector, including the establishment of a national fintech centre.
,According to Finch Capital, the slump in Irish fundraising reflects broader market trends across Europe, including economic headwinds and cautious investor sentiment.
,Total capital invested in European fintechs fell by a quarter, from €3.8bn to €2.9bn
,Should an expected return of confidence materialise, funding levels and deal volumes could and should recover, stated Finch Capital,
,“The challenges that fintech faced in 2023 were necessary for the sector to mature and become more sustainable,” said Mike Brennan, partner at Finch Capital.
,While funding may be down overall, and unicorn chasing has slowed, there is plenty of opportunity for companies that are capital efficient and have a clear path to profit, said Brennan.
,“With AI transforming the industry and significant dry powder still available, the next 12-18 months will mark a turning point for fintech in Europe. The next wave of fintech success stories will likely be built on sound financials rather than rapid revenue growth alone.”
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