Weekly update #71

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.

No episode of Builders this week. But you can always recover the last one, where I sit down with Meifan Shi (史美帆), managing partner at Waterpoint Lane , a venture capital and growth equity firm that specializes in unlocking transformative opportunities in the agrifoodtech sector.

With her, we will talk about the experience of launching the first fund coming from a syndicate, the agrifoodtech sector and the challenges they face, but also how to bring value to startups by collaborating with large corporations.

You can find the link to the full episode here on YouTube, or you can listen to it here on Spotify and here on Apple Podcast.

Coming back to us, I’ve been reading a very interesting report this week, the “Startups backed by the EU’s Framework Programmes” by Dealroom.co , Dealflow.eu and EU-Startups . The report is a comprehensive study of all startups backed by the EU to boost innovation in the region, in order to understand how efficient the EU Framework Programmes were. here the main takeaways:

The allocation of EU innovation funding, particularly from programs such as FP7, Horizon 2020, and Horizon Europe, collectively represents a total funding pool of €225 billion. The majority of this funding is directed toward corporates, universities, and broader research and development initiatives. Within this framework, approximately 12% of the funding, supporting around 30,000 SMEs, is allocated to small and medium-sized enterprises.

A more focused subset of this funding, about 5% or roughly €12 billion, flows specifically into startups. These 13,600 startups are defined as companies designed for fast growth and are typically venture capital-backable. The image also clarifies that this category excludes non-startup SMEs, such as consulting firms and agencies, emphasizing that the targeted startups are those with high-growth potential.

The data highlights a clear upward trend in investment, with annual VC inflows increasing from €1.6 billion in 2014 to a peak of €12.2 billion in 2022. Over time, funding has increased across all stages, but the largest expansions occurred at the later stages, especially between 2020 and 2022, reflecting the growing maturity of EU-backed startups.

While 2022 marked the high point, 2023 and 2024 show a sharp decline, with investment falling back to €6.9 billion in 2024, demonstrating the impact of broader market conditions, tightening capital, and potentially lower risk appetite from investors. This contraction has affected late-stage rounds the most, while early-stage funding has remained comparatively stable.

Among EU-backed startups, physical technology companies consistently dominate, receiving the majority of VC investment every year, with physical tech capturing 80% of funding in 2024. This is a clear reflection of EU innovation programs’ focus on deep tech, hardware, and industrial technologies. Meanwhile, software-as-a-service (SaaS) businesses account for a smaller but growing share of EU-backed investments, reaching 19% in 2024, while marketplace and e-commerce startups have received very limited support, representing only 1% of VC investment.

In contrast, the broader European startup landscape shows a very different investment profile. SaaS companies have grown to represent the majority of VC investment, rising from 46% in 2014 to 55% in 2024. Marketplace and e-commerce startups, which once attracted up to 38% of VC funding in 2014, have gradually declined to 13% in 2024, reflecting changing investor preferences and market saturation in consumer platforms. Physical tech, which dominates EU-backed investments, holds a much smaller share of total European VC investment, capturing only 32% in 2024.

Out of the total, 7,200 companies have received no external funding beyond their EU grant support, demonstrating that for many, public funding serves as their primary financial resource.

Among the 6,400 companies that did secure external investment, 2,000 have undisclosed funding amounts, while the majority fall into the earlier funding stages, with investments up to €4 million. As companies progress, the number of startups successfully raising larger rounds decreases significantly. Only 520 companies reached the breakout stage, securing between €15 million and €40 million, while just 33 companies raised more than €250 million, marking their transition into true scaleups.

The data shows that the older cohorts, particularly startups founded between 2010 and 2016, are significantly more likely to have progressed into later funding stages, including breakout rounds (€15-40 million) and scaleup rounds (€100 million or more). For example, among companies founded in 2014, 20 companies reached the €40-100 million funding range, while 4 raised between €100-250 million. In contrast, companies founded in more recent years, such as 2020 or 2021, are predominantly still at the pre-seed or early-stage levels, with very few progressing to breakout or scaleup stages.

Anyway we saw some very interesting news in the market this week. Klarna is looking to raise $1 billion in its upcoming $15 billion IPO, while Revolut strikes a partnership with Wizz Air . Ramp nearly doubled its valuation at $13 billion in a secondary share sales, while Alkami Technology acquired MANTL in a $400 million deal. In the VC industry, Foundation Capital closed a $600 million fund, IDC Ventures raised a $150 million fund of funds, but also ResilienceVC and Arāya Ventures with new funds. And finally, some very interesting funding rounds from fintech startups like Duetti , Niva , Zocks | AI for Advisors , Pointship , Lenkie , Swap , Flex , Grain and many others.??

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

Closed deals

• Quanta raises a $4.7 million round to help accounting embrace AI
• Tallinn based Pointship secures $1.9 million seed round to expand globally
• Anthropic closes a $3.5 billion round!
• Lenkie secures a ￡49 million series A to close the gap in UK's SME lending market
• Lantern Finance raises $1 million pre-seed round for its crypto backed lending product
• European fintech Cino secures a $3.5 million seed round to help people split the bill
• Orain secures a $6 million pre-series A and strikes a partnership with Visa
• J.P. Morgan joins FairPlay AI's $10 million round
• Brisbane based Instant raises $18 million at a $100 million valuation
• Flowdesk secures $52 million in a series B extension
• Canadian fintech Vault rebrands to Venn (formerly Vault) and raises a $21.5 million series A
• Swap secures a $40 million series B funding to solve cross borders trading nightmares
• Lithuanian banking platform myTU raises a $10 million round
• Fintech startup PassEntry raises $6.2 million for its digital pass solution
• London based Hands In secures $1.2 million to expand its multiword payment solution
• Data analytics platform Quantexa raises $175 million at a $2.5 billion valuation
• Fintech startup Flex raises $25 million at a $250 million valuation for its financial software solution for businesses
• Fintech startup Grain emerges from stealth with $50 million in funding to help businesses with FX volatility
• Music fintech Duetti secures $200 million for its royalties platform
• Indian fintech Rupifi is set to raise a $146 million bridge round
• Identity fintech startup Niva secures a $5.5 million investment from KASZEK
• Zocks | AI for Advisors secures a $13.8 million series A for its AI-based wealth advisory solution

Insights on the VC industry

• ResilienceVC closes a $56 million fund to support fintech working on financial inclusion
• IDC Ventures launches a $150 million fund of funds
• Foresight Ventures commits $25 million to boost innovation on BNB chain
• London based VC Arāya Ventures secures a first ￡18.2 million fund
• African VC LoftyInc Capital closes a third fund at $43 million for seed and series A
• Foundation Capital closes its eleventh flagship fund at $600 million

News on the market

• US based fintech Ramp nearly double valuation at $13 billion in share sale
• Alkami Technology acquires account opening technology provider MANTL in a $400 million deal
• Wizz Air strikes a partnership with Revolut to enable one-click payments
• Aquiline acquires SEI's family office business service for $120 million
• Klarna is looking to raise $1 billion at a $15 billion valuation in its upcoming IPO?
• Corsair takes full control of IDnow in a $295 million all cash deal
• Nexi Group partners with WeChat Pay to enable Swiss merchant accept payments from the Chinese fintech giant

A special look in the Italian market

• Axelera AI, startup europea che si occupa di chip per AI, ottiene un finanziamento da 61 milioni di Euro

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

Events you don’t want to miss

• Hello Tomorrow global summit - Paris, France | 13-14.03.2025 (Link to the event)
• Start summit - St. Gallen, Switzerland | 20-21.03.2025 (Link to the event)
• Nordic startup challenge - Hamburg, Germany | 24-26.03.2025 (Link to the event)
• Tech.eu Summit - London, UK | 25-26.03.2025 (Link to the 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

• Tutornow - Edtech that provides an online tutoring platform for students with learning disorders. Raising $500k to $1M.
• 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 #70