# FinTechs and Funding: Who Needs Who?
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2020-11-22
Category: INVESTING
Category URL: https://financedigest.com/category/investing
Meta Title: Angel Investing in Europe's Growing FinTech Sector
Meta Description: Discover how angel investors are crucial for early-stage FinTechs during Covid-19, with insights on funding trends and their impact on the sector.
URL: https://financedigest.com/fintechs-and-funding-who-needs-whohtml

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_**By** [**Marcel Van Oost**](https://marcelvanoost.com)_

_Investment is the lifeblood of FinTechs of all stages, from start-up to scale-ups – but what role will the Angel community play as start-ups face the Covid-19 challenge?_

Europe’s FinTech sector is still growing despite the current Covid-19 crisis – VCs and angel investors still have the appetite for investing in these start-ups.

Data shows that [VC investments are on the rise](https://sifted.eu/articles/vc-investment-europe-q3-2020/) for early-stage start-ups but angel investing has become the most sought-after type of investment, especially for early-stage start-ups.

In 2019, [angel investors gave over €612m into European FinTechs](https://sifted.eu/articles/fintech-angel-investors/), according to Dealroom. In 2020, the FinTech sector saw a significant drop from the number of deals and the amount raised right when the coronavirus pandemic hit Europe.

[Dealroom data (includes banking and payments, insurtech and proptech).](https://sifted.eu/articles/fintech-funding-data-corona/)

This data shows that the pandemic hit the FinTech sector fairly hard, but [funding deals](https://www.financedigest.com/private-equity-funds-approach-italys-serie-a-to-explore-media-rights-deal-sources.html "Private equity funds approach Italy’s Serie A to explore media rights deal -sources") are still happening.  Now, more than ever, FinTech start-ups are looking for [angel investors](https://www.financedigest.com/mark-lyttleton-what-is-an-angel-investor.html "Mark Lyttleton: What Is an Angel Investor?") eager to invest in innovative companies.

For angel investors, it is also [time to get out there and invest and guide](https://www.financedigest.com/a-guide-to-luxury-property-investment-in-the-time-of-covid-19.html "A guide to luxury property investment in the time of COVID-19") these new start-ups and scaleups.

Unlike VC investing, angel investing is more personal. Angel [investors are usually drawn to companies offering products or services](https://www.financedigest.com/credit-agricole-and-caceis-to-buy-rbc-investor-services-europe-unit.html "Credit Agricole and CACEIS to buy RBC Investor Services’ Europe unit") they are passionate about.  They have to believe in the company and the people behind it.

What [changed nowadays is how angel investors are scrutinizing their investments](https://www.financedigest.com/ngunu-tiny-discusses-how-covid-19-has-changed-the-future-of-impact-investment.html "N’Gunu Tiny discusses how COVID-19 has changed the future of impact investment"). Angel [investors and syndicates are aware of the implications during the Covid-19 but they are still looking for opportunities](https://www.financedigest.com/could-the-surging-build-to-rent-market-create-emerging-opportunities-for-investors.html "Could the surging build-to-rent market create emerging opportunities for investors?") to expand their portfolios.

**Angel investors and early-stage startups**

According to [Beuhurst](https://www.beauhurst.com/blog/top-angel-networks-uk/), in the UK between Q1 2011 and Q3 2020, 45% of equity fundraisings involving angel networks were for seed stage startups.

Angel investors can [bring more than money to the table for these early-stage FinTechs – they can offer knowledge and network](https://www.financedigest.com/strikes-bring-londons-transport-network-to-a-halt.html "Strikes bring London’s transport network to a halt").

For early-stage startups, angel [investing is a winning combination of bringing money](https://www.financedigest.com/six-tips-for-saving-money-and-investing-wisely.html "Six Tips For Saving Money And Investing Wisely") in together with the angel’s expertise.

![Marcel Van Oost](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/marcel-van-oost-picture-450x534-1736838717413-compressed.jpeg)

Marcel Van Oost

A good part of angel investors made their money through their own start-ups, and so can be an invaluable source of experience and support. They can advise on a startup road map and [guide their growth strategy](https://www.financedigest.com/image-guided-surgery-devices-market-recent-industry-developments-and-growth-strategies-adopted-by-players.html "Image Guided Surgery Devices Market: Recent Industry Developments and Growth Strategies Adopted by Players"), based on their own past experiences.

Angel investors can also be (former) VCs that do personal/private investing and they have a great [view on the market and an eye for early stage](https://www.financedigest.com/the-fruit-puree-market-to-stage-innovation-based-eagle-eye-view.html "The Fruit Puree Market To Stage Innovation-Based Eagle-Eye View") talent.

This support combined with networking is definitely a winning combination for both sides. Angel investors often share introductions with other angel investors about start-ups and early-stage [businesses and interesting investment opportunities](https://www.financedigest.com/unlocking-fresh-business-investment-opportunities-beyond-covid.html "Unlocking fresh business investment opportunities beyond COVID").

**Angel syndicates: a more diverse way to invest**

If you want to start as an angel investor, start small. That’s why angel syndicates can be a natural [progression for those investors wanting to invest](https://www.financedigest.com/global-lycopene-market-outlook-business-challenges-investment-opportunities-progression-status-revenue-expectation-and-forecast-2022-2029.html "Global Lycopene Market Outlook Business Challenges, Investment Opportunities, Progression Status, Revenue Expectation and Forecast 2022-2029").

In a syndicate, you can invest a relatively small amount of [money with other angels in different companies](https://www.financedigest.com/5-saas-tools-to-help-your-company-business-save-money-in-2022.html "5 SaaS Tools To Help Your Company/Business Save Money in 2022"), making portfolio diversification easier. Angel syndicates are also great for [networking and due diligence on the deals](https://www.financedigest.com/italys-cdp-and-partners-ask-tim-for-more-time-for-network-deal.html "Italy’s CDP and partners ask TIM for more time for network deal"), it’s like most of the work is already done by experts.

Angel syndicates are an easier way for those thinking of [diversifying their portfolio](https://www.financedigest.com/how-to-successfully-diversify-your-portfolio.html "How to Successfully Diversify Your Portfolio"). Traditionally angels [investors and angel syndicates tend to focus in one sector or type of company](https://www.financedigest.com/shipping-companies-feel-the-heat-as-investors-shun-coal.html "Shipping companies feel the heat as investors shun coal").

However, [Angel Capital Association](https://www.angelcapitalassociation.org/) recent study showed the most successful angel investment portfolios are those with  multiple types of companies and even different countries.

Diversification is not only about the number of investments. While this is a very important [part of investing](https://www.financedigest.com/ford-to-invest-around-300-million-to-build-electric-car-parts-at-uk-plant.html "Ford to invest around 0 million to build electric car parts at UK plant"), it’s just the beginning.

For instance, there are different types of entrepreneurs, those who are serial entrepreneurs and those that are starting a company for the first time.

Also, the stage of a company should not be a deal-breaker either. As data shows angel investors prefer to invest at the seed stage of a company, it’s [important to bear in mind that interesting deals](https://www.financedigest.com/exclusive-indian-car-makers-propose-tax-cut-on-imports-in-trade-deal-with-britain.html "Exclusive-Indian car makers propose tax cut on imports in trade deal with Britain") can happen at any stage – if a company is at a crucial growth stage, investing in it can be a lucrative deal.

As a FinTech angel investor with focus on [digital banking](https://www.financedigest.com/key-considerations-for-building-an-inclusive-digital-banking-experience-fit-for-the-future.html "Key considerations for building an inclusive Digital Banking Experience fit for the Future"), I often turn to the  segment of  business banking, as I think this a sub-sector is overlooked by the incumbent banks for many years. I also like to look out for [business banking](https://www.financedigest.com/prime-bank-and-agam-spark-lending-revolution-for-individuals-and-business.html "Prime Bank and AGAM spark lending revolution for individuals and business") fintechs/neobanks, globally not limiting myself to a specific country or region.

So, even within the niche of digital banking, [investing can still  be diverse with several startups](https://www.financedigest.com/uk-gold-investment-startup-minted-partners-with-lux-rewards.html "UK gold investment startup, Minted, partners with LUX Rewards") in this space in different markets.

Early-stage investing is an art, it has its risks but with [big rewards at the end](https://www.financedigest.com/ecb-goes-big-with-50-basis-point-hike-ending-negative-rates-era.html "ECB goes big with 50 basis-point hike, ending negative rates era") of the road.

**In conclusion**

Angel investing is crucial for early-stage startups to survive and continue to [drive innovation](https://www.financedigest.com/stupendous-innovation-to-drive-the-vegan-flavors-market.html "Stupendous Innovation To Drive The Vegan Flavors Market") in the FinTech sectors. Angel syndicates are [paving the way](https://www.financedigest.com/increasing-awareness-of-infant-health-is-paving-way-for-baby-sleeping-bags-market-sales.html "Increasing Awareness Of Infant Health Is Paving Way For Baby Sleeping Bags Market Sales") for new and seasoned investors to diversify their portfolio.


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