At the start of 2023, the European tech ecosystem has created nearly 150 unicorns – an incredible success rate, led by successful fintech projects such as Revolut, and Adyen. For more than a decade, fintech has been an integral and important part of European technology, writes

It was a difficult period, but…

After ten years of monumental growth, fintech is experiencing its first more difficult period. Having already been hit by the tech downturn, layoffs, the cost-of-living crisis, and the looming recession, the news from the Wall Street Journal that fintech companies underperformed financials and tech stocks in 2022 makes for rather uncomfortable reading, which unfortunately wouldn’t surprise anyone familiar with it.

Vulnerability to high interest rates, the removal of pandemic catalysts and a focus on businesses that are profitable or have a clear path to profitability are some of the reasons for the poor performance of fintech stocks.

Fintech has already changed the business and personal finances of millions of people around the world. Alongside innovations that have improved legacy systems in banks, and B2B technologies that have increased security, privacy and risk for consumers, consider the millions of people with Revolut or Monzo cards in their wallets.

As well, we might consider the companies that have survived thanks to SME funding platforms, or for the merchants using digital payment devices. Fintech is having an even bigger impact in emerging markets through online money transfers, microloans and mobile payments.

According to experts, despite economic difficulties, fintech will continue to attract huge venture funding in 2023.

Fintech companies predispose healthier businesses

Now, more than ever, every dollar counts. Today, fintech companies can add tremendous value in improving companies’ financial back-office functions and run healthier businesses.

Crises create opportunities

More forecasts suggest that the current economic environment will make it difficult for fintech entrepreneurs to raise capital unless they can demonstrate attractiveness. At the same time, crises create opportunities. Entrepreneurs are using technology to help consumers pay their debts more efficiently, get faster mortgage approvals, and access BNPL’s services to manage their personal and/or business finances.
There’s always a chance for proper business

Although fintech stocks are down, there are still significant opportunities for successful businesses. The outliers and risks are those that can succeed in challenging economic conditions, those that create businesses designed for long-term growth and scale.

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