US Predators Eye Up European Fintechs For ‘Bargain’ Deals

U.S. companies are eyeing European fintech bargains in 2023, lured by a strong dollar, declining European valuations and the possibility of picking up some fintech gems.

Last year, Silicon Valley-based software provider Karuta Acquisition of UK fintech company cap desk When Vauban On the other hand, a US private investment company Republic Completed acquisition of UK crowdfunding platform SeedingThese two deals followed hotly after US banks JP Morgan Picks up UK digital asset management platform nutmeg 2021 years.

Experts believe the trend of US companies to acquire UK and European fintechs will rise next year.

Carta CEO Henry Ward recently commented, “I’m not going to stop thinking about M&A,” adding, “There’s a lot of cool stuff going on, both in the UK and continental Europe.”

The expected surge in US companies embarking on fintech across the Atlantic is due to several factors as US executives look to the prizes on offer.

One of these factors is probably the strength of the US dollar against the pound and the euro (the dollar has risen about 20% against the two currencies since the beginning of the year, which is definitely why UK and European stocks are currently cheap. means). It is very likely that it will continue next year.

Other factors include Europe’s growing global reputation as a fintech powerhouse, the declining reputation of European fintech against US fintech, and the inevitability of global consolidation in many fintech sectors. Believing US raiders are included.

The UK and Sweden have far outperformed the rest of Europe in the most important areas and we expect continued investor interest.

With a strong European fintech likely to come into play in 2023, experts say there will likely be more attacks on Europe from either rival US fintechs, traditional US banks, or private equity firms. is likely to be done.

Fintech Times We spoke to several executives about whether US companies will be targeting the UK and Europe to score a “bargain” in 2023.

Will 2023 see more U.S. acquisitions of European fintechs?

Chris Gredhill Independent Fintech Advisor said: 2022 saw a revision in ratings across the technology industry, including fintech.

There are bargains. The consolidation of fintech players is also beginning to reveal market leaders who are likely to continue to dominate their respective areas of financial services over the next decade.

U.S. companies with ample war money will look voraciously at the European fintech market. Combined with drawbridges being lifted in other global markets that are inherently restrictive.

lucas timberlake general partner Fintech Ventures Fundand added:

If it does happen, it will likely be on an opportunistic basis (e.g. undercapitalised/insolvent companies being acquired) rather than on a strategic/growth oriented basis. We expect it to begin to recover again in 2024, but will not surpass the record levels of 2021 anytime soon.”

in the meantime Nicole Perry Digital Business Growth Strategy Director at Fintech Consultancy 11FS, Thinking about the factors driving US investment into European fintech, it becomes clear why this is happening, and the trend could continue and potentially escalate into 2023. indicates that there is

First and foremost, UK-denominated stocks are arguably cheaper than they have been in years past. It is undervalued.) This is not going to change dramatically any time soon.

Having said that, it is a trend that has grown over time and is not driven solely by price. A country is born out of this region.

The supportive regulatory environment and strong talent pipeline have created a pool of fintech entrepreneurs eager to make a difference. Combined with a strong cross-border collaboration, and a spirit of unity, it makes scaling not only compelling, but achievable.

If more US companies were to make European acquisitions, which fintech sector would they be most likely to belong to?

Alexander says: However, we do not expect this activity to increase in 2023.

Despite the recent controversy, the blockchain and crypto sector will continue to gain traction, said Perry. So there is a clear consumer desire to at least try this technology.

But more importantly, real-world use cases are emerging to validate Web3 infrastructures, thus increasing interest and confidence in the space.

At 11:FS, we hear consistent stories about wealth tech developments from both fintechs and banks. Is not.”

Which European market do you think US companies are focusing on? Is it the UK, or are they looking at Europe as a whole?

Alexander says: London, for example, has just overtaken New York and San Francisco as the top cities for fintech investment activity in 2022, with more than $10 billion of him invested in 2022. That said, I believe US companies will pay more attention to other European fintech hubs such as Paris, Berlin and Stockholm.

Mr Perry said: It is also likely that US companies will look to Estonia. Estonia has the highest number of startups per capita in Europe and a world-class track record in building unicorns.

With an incredibly digitally savvy and entrepreneurial population of 1.3 million people, it is no surprise that disruptive, valuable and committed investment opportunities continue to emerge.