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Greetings, readers, and here’s hoping you’ve made it through the froth of Black Friday.

Amid warnings that many “deals” advertised are not actually a good value for your money, it seems remiss not to flick to Flic, the Financial Literacy & Inclusion Campaign supported by the FT.

I’d highly recommend browsing some of the work here (for full disclosure, you might spot a few pieces I’ve written myself, including one on the excellent work done by community lenders).

Navigating an increasingly complex financial world has only become more important with rising costs and continued uncertainty.

I’m keen to hear your thoughts and advice on how to best handle the fairly bleak economic outlook we’re facing. As always you can reach me at sid.v@ft.com.

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Europe’s fintech future

At this point, it’s a cliché to talk about the fintech sector’s woes. Valuations have crumbled in down rounds, staff numbers have been slashed in waves of lay-offs and would-be IPOs have been pushed into an uncertain future.

Among the victims was Europe’s most valuable private fintech, Klarna, whose valuation fell to a fraction of its $46bn peak in its latest funding round in July.

“There will be players who have trouble accessing [their] next funding round and have to adjust their value,” said Marc-Alexander Christ, co-founder of payments fintech SumUp.

SumUp itself had a valuation in June of €8bn; back in January, it was reported to be targeting a value as high as €20bn. Christ, however, said that the ability to raise funds at all in a difficult summer was a sign of strength.

“If you ignore how crazy 2021 levels of funding were, the funding round and valuation look pretty healthy,” he said. “You could say hell was freezing, and SumUp still has access to capital despite not really needing the money.”

Others are also convinced that the future for European fintech is not a wholly bleak one. Among them is Tim Levene, chief executive of Augmentum Fintech.

The fund, which is listed in London, has a portfolio including peer-to-peer lender turned bank Zopa, neobank Tide and anti-fraud platform Onfido.

Levene, who launched online betting group Flutter.com at the turn of the millennium, said the situation that the sector now faced was quite different to the dotcom crash.

“The European venture market, which wasn’t particularly established, disappeared overnight,” he said of the early aughts. “Today, you can see that European venture has more money in committed capital than at any point in history.”

That does not mean there’ll be a return to the heady days of 2020 and 2021, when entire funds were used up in 12 months.

“We’ll see capital deployed over a more moderated period, maybe three to four years,” said Levene. “This is how long they should be deployed, it’s a reversion to historical norms.”

The pandemic period saw too much “tourist money”, he said, with some companies raising too much capital at too high a price. Looking to the future, companies are unlikely to be able to rely on that source of cash.

And Christ emphasised that the current environment effectively weeded out the strong players from the rest.

“There’s a select few that have good access to capital — it’s a consistent story,” he said. “We’ll see this [battle for capital] at least up until next summer.” At that point, the environment might look healthier, Christ added.


“In a time of distress, people are reviewing many other things than just the direct threat [cost of living crisis], they are keen to understand the bigger picture.” — Mathias Wikström, chief executive of Doconomy

I had a chat with Wikström at Doconomy — which has been working with Mastercard since 2019 to help users reduce emissions through carbon offsets — about the future for climate-related fintech.

There has been a proliferation of companies targeting consumers, ranging from offering wooden credit cards to tracking the carbon intensity of their spending.

But just as economic woes have stymied climate progress at a macro-level, there is a question about consumer behaviour: will they care about choosing products with fewer travel miles if they are more expensive?

Wikström at least, is convinced that demand remains strong.

“We see frustration from citizens, as well as curiosity growing [on how they can make more sustainable choices],” he said.

Recommended reading

ClearBank reaches profitability The fintech, which offers embedded banking — allowing non-financial companies to offer products such as insurance or payments — launched in 2017 as the UK’s first purpose-built clearing bank in nearly 200 years. After securing £45.4mn in revenue in the year to October, the group will expand internationally after officially reaching monthly profitability.

Neobanks targeted by scammers Smart reporting from Tim Smith and Amy O’Brien on figures from the Financial Ombudsman Service shows that digital banks are facing soaring fraud rates.

Smaller UK businesses raise record levels of investment Data from the British Business Bank show that equity investment into small-and-medium-sized enterprises rose 88 per cent year on year to £18.1bn.

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