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European fintechs attracted €3.6 billion in capital investment in the first half of 2025, marking a 23% year-on-year increase, though still significantly below the €15.3 billion peak of H1 2022. Despite the drop from earlier highs, fintech remains a cornerstone of Europe’s tech ecosystem, accounting for 23% of all funding across the continent, up from 18% in the same period last year, according to new data from Finch Capital.
The UK dominated the landscape, securing 56% of total funding, with London alone responsible for 79% of that figure. Unlike other European hubs, the UK market demonstrated greater depth and diversity, with its top two transactions contributing less than half of the total capital raised. Homegrown fintech champions such as Monzo, Revolut, and a thriving payments ecosystem continue to underpin London’s global fintech reputation.
Elsewhere, activity was more concentrated. Germany and France relied heavily on a handful of large transactions in AI-powered compliance, wealthtech, and capital markets analytics. While Germany recorded a 189% increase in median deal size year-on-year, its deal count (27) lagged France (38).
Artificial intelligence remains a key growth driver: AI-driven fintechs represented 21% of deal volume in H1 2025, up from 16% in 2024. However, they accounted for just 7% of overall deal value, reflecting an early-stage, experimental phase of adoption.
The report also highlighted a sharp slowdown in engineering team growth across top fintechs. Net new hires, which grew by 20% in 2022, dropped steadily to 14% in 2023, 9% in 2024, and are projected to reach only 2% by year-end 2025. Rather than building models from scratch, firms are shifting resources toward optimisation, integration, and model fine-tuning.
“Companies simply don’t have the resources to develop proprietary models,” said Aman Ghei, partner at Finch Capital. “Most are leveraging existing models, building wrappers around them, and investing in specialised roles like prompt engineers to maximise efficiency. This is the direction the market will follow for the next year or two.”
The findings underline Europe’s evolving fintech landscape—where London continues to lead, AI is shaping the future, and firms are adapting to deliver more with leaner teams.
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