ary·Venture CapitalEurope must build better public for fins and not chase the bubbleBy Aman GheiBy Aman Ghei Aman Ghei is a partner of Amsterdam-headquartered Finch Capital, which recently published the State of European Fin 2025.
Finch Capital's Aman Ghei.Finch CapitalEurope is to more than 9,000 fins.
It has duced global champions such as Wise, Klarna, and Adyen in payments, Revolut and Monzo in banking, and Mambu in B2B software.
Across the Atlantic, the United States plays host to more than 13,000 fins, with leaders Stripe, PayPal, and Chime.
Both continents coexist and compete to duce the most influential companies in financial nology, though the paths taken and outcomes achieved often vary widely.
European fins raised €3.6 billion in the first half of 2025, 23% higher than in the same period in 2024, with funding on track to reach €7.6 billion for the year.
In 2021, this total reached almost €16 billion. But 2021 was an anomaly, a sugar-high: a liquidity-driven bubble when venture investment hit record highs.
We don’t expect to see those levels for another five to seven years, nor should we seek to recreate that. What matters now is building stamina, not chasing another rush.
European fin funding is on a steady path, tracking at 2019 levels. The challenge for European isn’t chasing bubbles but building durable ecosystems where capital formation is balanced and sustainable.
European scale-ups have long scaled under tighter capital constraints than their American counterparts.
The result is companies built on sturdier foundations, less vulnerable to the ups and downs of funding .
But also, a persistent excess demand for capital and, in turn, more reasonably priced assets in the small-to-mid-market. Visible cracks However, some cracks are starting to show.
In 2025 so far, just two deals, Rapyd and FNZ, accounted for nearly half of European fin funding, leaving much of the rest of the market with less attention.
Concentration at the top is not unusual in periods of market caution, but it highlights the growing importance of building a stronger funding base for mid-market companies.
By contrast, in the United States the top two fin deals represented less than 10% of total funding, with capital spread across hundreds of Series A-C rounds.
This reflects the greater depth of US capital , supported by large institutional pools such as pensions, endowments, and crossover funds.
Europe has historically relied more heavily on venture funds and corporate investors.
For example, US public pensions and endowments together commit well over $1 trillion to private , compared with a far smaller role played by European institutions, where government agencies and corporates are more minent backers.
This means that in quieter years, capital tends to cluster around the largest names.
The result is a thinner middle market, not because of a lack of quality companies, but because the supporting financial structures are still .
Strengthening that layer would help ensure a broader range of companies can scale and eventually reach the public .
The building backlog Europe now faces an estimated €300 billion backlog of nology companies waiting to list. A treasure trove for es and employees seeking to be unlocked.
But the backlog won’t overnight. Assuming 15% of this unicorn equity is floated, it would take nearly a decade to at the pace of 2024 listings regardless of where they list.
And the bar today is set high for IPOs. The sub-$500 million revenue IPO is all but extinct.
Mature private capital and strategic acquirers with heavy war-chests allow companies to stay private for longer, or forever.
However, these same features also allow Europe’s small-to-mid-cap exit market to excel.
The continent ders close to 1,000 nology exits annually of $100 million-$500 million, roughly the same size as the US market and with leaner capital journeys.
It benefits from a deep pool of strategic acquirers, and active mid-market PE funds.
Private equity buyout accounted for 40% of nology exits in the $100 million-$500 million range in Europe, roughly twice the portion in the US.
Europe’s exit market offers resilience and consistent outcomes for stakeholders, not reliant IPOs.
Europe does not suffer from a shortage of strong companies and not every company needs to raise capital as if it were on the path to €500 million+ revenue (ARR).
A €50 million ARR , given the right capital environment, can be more than good enough for founders, for investors, and for Europe’s competitiveness.
But the continent could do more to open up routes for its es.
What the continent can do First, exchanges need to allow companies to list with greater flexibility, so that European firms can list at scale without being forced to seek more favorable terms overseas.
Second, the continent needs a vibrant mid-cap investor base, bridging the gap between venture and growth equity.
The companies are there, the exit market is vibrant, and the demand for scale-up capital is in excess.
Pension funds, sovereign wealth funds, and institutional investors have a role to play in seeding this layer of the market, just as crossover funds have done in the US.
For instance, private equity assets account for roughly 14% of US pension fund portfolios, today, European pension fund’s PE allocations are a fraction of this.
The next phase of Europe’s nology story should not be defined by bubbles or backlogs, but by building that allow its companies to scale sustainably, list locally, and thrive globally.
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