Weekly update #99

Welcome to this edition of the weekly newsletter. The idea behind this is to gather all the information in the startup ecosystem in one place, with a special focus on the fintech market and the VC industry.

Builders is back with Season 3! In this episode, I sit down with Mark Beeston and Alexander Ross , founder and general partner at Illuminate Financial. Take a quick look at a short clip below, while you can find the full video here on YouTube, and the audio here on Spotify or here on ApplePodcast.

Mark Beeston is a 30 year+ veteran of financial markets and is Managing Partner and founder of Illuminate Financial Management, a venture capital firm focussed on financial services technology currently investing from its third fund and which currently lists nine strategic partner LP’s drawn from the largest global names in banking, finance and markets infrastructure.

Alexander Ross, joined Illuminate early-on to help set-up and launch the first fund. Alexander joined from Bain & Company where he advised Top Tier private equity funds on acquisitions of TMT & Fintech companies, he also worked on fund strategy and bank restructuring projects. Alexander worked in the Technology division at J.P. Morgan, an Agri-food social enterprise in Ghana, and co-founded the online booking system provider, Teamup.

Mark launched the firm in 2014 following a long career in capital markets where he had been both the consumer of financial markets technology as well as the entrepreneur (T-Zero / Creditex), operator (ICAP), and early stage funder of capital markets businesses.

With them, we talked about launching a fund from scratch, what can an investor bring to the table in terms of value and network, but also what to look for in fintech founders and their vision on the market itself.

But this was also the week of Money20/20 Middle East in Riyadh! It was an amazing event, with the top investors and companies from the MENA region. And yes, I lost count of how many times I said stablecoin and AI.

During the event I had the pleasure to moderate a panel about Cross-Border Payment & Investments: The future of fintech capital flow, with an amazing list of guests: Ashish Aggarwal, partner at PayPal Ventures, Rinat Ablet, CRO at tiqmo, Monica Brand Engel, co-founder of Quona Capital, and Umer Sharif, investor at Joa Capital. On top of that, it was an amazing event, with the best fintech companies and investors from the MENA region.

Coming back to us, I’ve been reading a very interesting report this week, the “State of European Fintech 2025” by Finch Capital. The report is an interesting overview of the first 6 months of investments in fintech in 2025, including main trends, n. of deals and exits. Here my main takeaways:

European fintech investment showed resilience in the first half of 2025, with total capital raised reaching €3.6 billion, a 23% increase from €2.9 billion in the same period of 2024. However, the number of deals fell sharply, with only 340 fundraising rounds completed, down 32% from 498 last year, reflecting a market concentrating around fewer but larger transactions. The top 20 deals accounted for 73% of total funding value, up from 62% in H1 2024, confirming this trend. On the M&A side, 91% of announced deals were below €500 million, slightly higher than 89% in the previous year.

Regionally, the UK maintained its lead but saw its share of European fintech funding fall to 56%, down from 60%. Meanwhile, fintech firms captured 23% of all European funding, up from 18%, and AI-driven startups rose to 20% of fintech funding, compared with 16% in 2024. R&D expansion slowed, with top firms reporting only 2% year-on-year team growth.

Total investment volumes peaked in 2021 and 2022, driven by landmark rounds from major brands in this space. The trend shifted in 2023, when funding volume contracted by 32%, although deal value still remained substantial with large transactions from firms like Rapyd, Ledger and Finastra. In 2024 the contraction continued, but H1 2025 data shows a recovery with deal value rising 23%, despite a decline in overall deal numbers.

The share of funding captured by the top 10 deals illustrates this concentration: it grew from 37% in H2 2023 to 73% in H1 2025. Payments and banking remain the dominant verticals, with firms such as Monzo Bank and FNZ raising significant rounds this year. While activity levels are lower, capital is increasingly flowing into a small group of leading European fintech players.

Fintech continues to account for a steady share of European venture activity, with deal value returning to its long-term median in early 2025. Over the past six months, leading investors such as Sequoia Capital, Balderton Capital, Atomico, Speedinvest, Highland Europe, Creandum, Eurazeo, HV Capital and Accel allocated between 15% and 30% of their deal volume to fintech. The sector’s median share stands at around 25%, indicating a balanced but selective allocation across portfolios.

Looking at the broader trend, fintech’s proportion of total deal value fluctuated over the past six years, from just above 20% in 2018 to peaks near 35% in 2023, before falling sharply in 2024. In H1 2025, the share has normalized at roughly 24%, almost exactly in line with the historical median. This suggests a market correction: after periods of expansion and contraction, fintech investment is stabilizing at sustainable levels, with investor activity concentrated among established venture firms.

Exit activity in European fintech has fluctuated significantly over recent years, with 2024 marking the widest gap between mid-sized and large transactions. Deals in the €100–500 million range outnumbered those above €500 million by a factor of 5.3, the largest difference recorded to date. In H1 2025, this ratio moderated to 3.0, with a limited number of exits, but the trend still shows mid-market transactions dominating the landscape.

On the value side, deals between €100–500 million reached €3.2 billion in 2024, underscoring strong activity in this bracket. M&A and private equity buyouts were the main drivers, while IPOs played only a minor role. By comparison, H1 2025 has started slowly, with a noticeable decline in transaction volume across all categories. The data suggests that while mega-deals remain scarce, the mid-market continues to underpin fintech exit activity, reflecting a preference for strategic acquisitions and private market liquidity over public listings.

Anyway we saw a lot of interesting news this week. Tether.io launched a US-regulated stablecoin, BlackRock wants to tokenize $2B of ETFs, and PayPal released a one-to-one payments link with crypto support. Klarna expands Apple Pay partnership with in-store installments to US and UK, MoonPay acquired Meso, and Workday acquired Sana. NVIDIA is going to invest $2B in UK fintechs and SumUp is testing the waters for a $15B IPO. Lots of movement in the VC ecosystem! We saw Quadrille Capital closing a $500M fund, Shapers closing a $75M fund to invest in fintech, but also Outlast Fund and BNVT Capital with new funds. And finally some very interesting funding rounds from fintech companies like HALA, Kredete, Arch, Pack, Tabs, PayNearMe, Conduct, Finary and Spare.

But let's take a closer look at the main news of the last seven days.

Closed deals

• HALA secures $157M in landmark Series B to drive SME banking growth
• Tamara just announced a $2.4 billion facility on stage at Money20/20 Middle East!
• Kredete raises $22M Series A to expand credit-building infrastructure with stablecoin transfers
• Pack raises €3.5M to expand AI-powered HR platform
• Arch secures $52m Series B to scale private markets infrastructure
• Rulebase raises $2.1M to automate fintech back-office with AI
• Tabs secures $55M Series B to automate revenue workflows with AI
• Defacto secures €16M to scale SMEs lending ambitions to €10B
• SEON secures $80M Series C to scale AI-driven fraud prevention
• Splash Financial secures $70M Series C to expand AI-driven lending platform
• PayNearMe secures $50M Series E to expand payment experience platform
• Conduct raises $12M to reinvent legacy ERP with AI
• Finary secures €25M Series B to scale AI-driven wealth management across Europe
• Omnea secures $50M Series B to scale AI procurement platform
• Plino raises €650K to bring AI-driven financial planning to SMEs
• Aleph raises $29M Series B to accelerate AI-native FP&A
• Stablecore secures $20M to expand digital asset banking for community institutions
• Spare raises $5M to scale Open Banking infrastructure across MENA

Insights on the VC industry

• Quadrille Capital raises €500M to back European and US tech growth
• Como 1907 and The Players Fund launch startup accelerator program
• Shapers launches $75M Fintech Fund I
• Outlast Fund launches €21M vehicle to back Baltic-Nordic founders for the long game
• BNVT Capital launches $150M fund to drive “Benevolent Disruption”

News on the market

• Tether.io launches USA₮, a US-regulated stablecoin
• SumUp weighs $15B IPO as London faces fintech listing test
• Klarna employees gain early share sale rights after IPO debut
• BlackRock plans $2T real-world asset boom with tokenization of all ETFs
• Revolut will invest $500M to accelerate U.S. expansion
• Revolut apparently hits $1.4B in revenue in Q2 according to investor documents
• Google unveils Agent Payments Protocol (AP2) to power AI commerce
• Google Pay and Alipay+ to launch in Saudi Arabia under SAMA’s vision 2030 push
• PayPal Introduces One-to-One payment links with crypto support coming
• Visa Introduces Visa Private for high-net-worth clients in the UAE
• Workday to acquire AI platform Sana in $1.1 Billion deal
• Klarna CEO restructures $1.1B stake through flat capital
• Klarna expands Apple Pay partnership with in-store installment plans in US and UK
• MoonPay acquires Meso, bringing PayPal-veteran founders into leadership
• NVIDIA is going to invest £2B in UK firm such as Revolut and Wayve

A special look in the Italian market

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And here some useful resources for everyone involved in the ecosystem:

Events you don’t want to miss

• Italian Tech Week - Turin | 1-3.10.2025 (link to event)

You have a cool event you want to mention or to sponsor? Feel free to send me a DM.

Startups raising funds

• Loyyal - Loyalty platform from the MENA region, with entities in the US and South East Asia, provides a B2B2C platform to handle multiple loyalty programs and earn rewards all over the world. Raising a $6M Series A
• Freedhome - Proptech and fintech platform, enabling people to be able to gain profit from real estate by renting them to intermediaries. Raising a $1M seed round

• Weagle - B2B Tech startup that provides the very first browser designed for company, with total security for sensitive data. Raising $6 millions for their seed round.

• Shoppy Code:Gift card platform that offers a points based loyalty program. They share part of the profits coming from marketing budgets with their customers. Raising $500k.

Take also a look at the last edition of the newsletter, Weekly update #98