Core Insights - Europe is home to over 9,000 fintech companies, producing global leaders like Wise, Klarna, and Adyen, while the US has more than 13,000 fintechs with prominent players such as Stripe and PayPal [1] - European fintechs raised €3.6 billion in H1 2025, a 23% increase from H1 2024, with projections of reaching €7.6 billion for the year, although 2021's peak of nearly €16 billion is seen as an anomaly [2] - The focus for European markets is on building sustainable ecosystems rather than chasing funding bubbles, with European scale-ups operating under tighter capital constraints compared to US counterparts [3] Funding Dynamics - In 2025, two deals, Rapyd and FNZ, accounted for nearly half of European fintech funding, indicating a concentration of capital at the top and highlighting the need for a stronger funding base for mid-market companies [4] - The US capital markets are deeper, supported by large institutional investors, while Europe relies more on venture funds and corporate investors, leading to a disparity in funding distribution [5] - In quieter market conditions, capital tends to cluster around larger companies, resulting in a thinner middle market, which is not due to a lack of quality companies but rather underdeveloped financial structures [6]