Europe's Fintech Boom Sparks Warning: Better Public Markets Needed to Avoid Bubble Burst

Europe Must Build Better Public Markets for Fintechs to Avoid Chasing the Bubble The European fintech industry is on a roll, with over 9,000 companies raising €3.6 billion in funding during the first half of 2025, a 23% increase from the same period last year. However, this growth is not without its challenges. Aman Ghei, partner at Amsterdam-headquartered Finch Capital, warns that Europe must build better public markets for fintechs to avoid chasing the bubble created by venture investment in 2021. A Record Year, but Not Sustainable In 2021, European fintechs raised a record €16 billion in funding, driven by a liquidity-driven bubble. While this may seem like a success story, Ghei cautions that such levels of investment are not sustainable and should not be the goal for the industry. "We don't expect to see those levels for another five to seven years," he says. Market Implications The European fintech market is highly competitive, with over 9,000 companies vying for attention and funding. This has led to a crowded landscape, making it increasingly difficult for startups to stand out. Ghei notes that the industry needs better public markets to provide more options for companies to list and raise capital. Stakeholder Perspectives Ghei's comments are echoed by other industry experts who believe that Europe must create more robust public markets to support fintech growth. "The current landscape is fragmented, with too many private equity investors chasing a limited number of deals," says a spokesperson from a leading European venture capital firm. "We need more public markets to provide liquidity and give companies the option to list and raise capital." Future Outlook While the short-term outlook may be uncertain, Ghei remains optimistic about the long-term prospects for European fintechs. "The industry is still in its early stages, and we are seeing a lot of innovation and disruption," he says. "With better public markets, I believe Europe can become a global leader in fintech." Next Steps To achieve this goal, Ghei recommends that policymakers and regulators work together to create more robust public markets for fintechs. This could include initiatives such as: Creating more specialized exchange platforms for fintech companies Streamlining the listing process to make it easier for startups to go public Providing more funding options for fintech companies through government-backed programs By taking these steps, Europe can create a more supportive ecosystem for fintechs and avoid chasing the bubble created by venture investment in 2021. As Ghei notes, "The future of European fintech is bright, but we need to get the foundations right." *Financial data compiled from Fortune reporting.*