European fintechs remain reliant on US investors, but sovereignty gap is closing

According to the report. the most celebrated fintechs - Revolut, Klarna and their peers - are world-class at delivering customer service and experience, yet built on US cloud infrastructure, dependent on US payment rails, and backed by US investors for their largest growth rounds.

Tech sovereignty has been brought to the fore in this year’s report, which comes against a backdrop of increasing trade tensions, debate about tariffs, and the need for Europe to be self-reliant in terms of its technology stack and infrastructure.

The report highlights that without the support of US investors, particularly for later-stage funding, Europe would have a €9bn gap to fill. European fintechs are self-sufficient in raising venture capital at the early stage, for less than €100mn, but over this amount, they are more dependent on US capital. For larger rounds, the reliance is even greater. The report notes that all European funding rounds above €1bn in the last five years were led by US investors.

Without US investors, Europe needs pension funds to fill the €9bn funding shortfall for breakout companies, a proposal that has already been backed by UK chancellor Rachel Reeves.

Aman Ghei, partner at Finch Capital, comments: “The €9bn dependency on US capital is real, but it’s important to call it what it is: a policy gap, not a market verdict on Europe. The frameworks just haven’t caught up with the opportunity. The UK’s pension commitment shows they can, and fast. If EU policymakers follow, Europe could be funding its own growth rounds at scale before the end of the decade.”

The report shows that Europe’s fintech sector has been gaining ground in terms of attracting more capital and closing the funding gap with the US, with the continent raising close to €40bn in venture capital/growth funding between 2022 and 2025.

The UK is the undisputed leader in European fintech, taking the lion’s share (70%) of venture capital/growth deals on the continent in 2025. London dominates the UK fintech scene (accounting for 72% of all of the UK’s deals), and the city as a fintech hub is now larger than San Francisco and New York City in terms of funding value.

Says Ghei: “London’s ranking as the world’s number one fintech hub is not symbolic - it reflects structural momentum. Europe has quietly built the deepest regulatory expertise and financial infrastructure talent pool globally. The funding gap with the US is narrowing, not because America is weakening, but because Europe is compounding.”