Total funding to Portuguese Fintech companies exceeds EUR 1 billion

by James · November 21, 2022

In 2022, the Portuguese fintech ecosystem entered a new stage of development, characterized by greater maturity of the sector, continued innovation through partnerships and a dynamic venture capital (VC) market, a new report from industry trade group Portugal Fintech, in collaboration with KPMG , Visa and law firm Morais Leitao, claims.

The Portugal Fintech Report 2022, released in October, shows a resilient fintech industry that has continued to grow, innovate and attract investor interest in 2022, despite falling tech stocks and concerns about an economic slowdown.

This year, the total funding of Portuguese fintech companies so far has passed €1 billion, with blockchain and cryptocurrency, lending and credit, and regtech and cyber security attracting the most funding. These segments respectively secured 76%, 12% and 6% of all capital raised by Portuguese fintech companies so far, according to the study.

Significant deals from fintech companies based in Portugal or with Portuguese founders were registered in 2022. These include Uphold’s €30.6 million round, Elucidate’s €6.2 million seed funding and Habit’s €5.2 million fundraising, the report notes. Uphold is a digital trading platform; Elucidate is a financial crime risk management platform; and Habit is an end-to-end provider of insurance solutions.

Industry partnerships are also increasing in number, the report says, with banks and insurance players moving beyond pitching competitions to now truly collaborating and testing new capabilities with fintech companies.

The report cites names such as LOQR, hAPI, Visor.ai and Think Future as among the fintech companies and technology providers that have recently partnered with banks and established companies.

LOQR is a digital onboarding platform for financial institutions that collaborates with Credibom and Banco Portugues de Gestao; hAPI is a provider of APIs that automatically collect data for onboarding use cases working with the likes of Banco Primus and Credom; Visor.ai is an artificial intelligence (AI) conversational platform that works with insurance company Fidelidate; and Think Future is an insurance company that counts among its partners MDS Group, a multinational insurance and reinsurance brokerage, risk advisory and benefits management company.

Fintech trends in 2022 and 2023

With the Portuguese fintech sector continuing to grow and develop, industry participants and stakeholders were interviewed as part of the report to share the new trends they have observed in 2022 and those to watch for next year.

Eva Ruiz, head of fintech at Visa in Southern Europe, highlighted the rise of open finance, noting that the movement “will unleash the development of a range of new businesses and services” and bring about a host of innovative products and services that are more inside- adapt to the customers’ preferences and needs.

However, she warned that open finance will increase the complexity of the current open banking ecosystem, making it increasingly necessary to address the challenges of ensuring data security and privacy.

Joaquim Marques, Commercial Director of Weavr, emphasized the growing appetite of customers for integrated experiences, noting that this has led to the rise of embedded finance. As we move into 2023, Marques expects embedded financial products to become increasingly simpler and more intuitive, leading to increased use of such products. The range of products and services offered through embedded finance will also expand and expand to all financial services.

Dyma Budorin, co-founder and CEO of Hacken, and Andrii Matiukhin, CTO of Hacken, said increased retail and institutional participation in the digital asset sector has made the space a lucrative target for hackers and criminals. At the same time, a lot of innovation is happening in decentralized finance (DeFi) and Web 3.0, two segments that are believed to have great potential to increase financial inclusion and offer superior customer experiences.

Against this backdrop, securing blockchain protocols will be critical to blockchain startups and projects, and will define the winners and losers, they said.

Carlos Eduardo Martins, a sustainable finance expert, said that environmental, social and governance (ESG) considerations and their integration into business models and decisions have increased significantly over the past three years.

Going forward, the publication of the EU’s taxonomy regulation will dramatically change the approach to sustainability in most organisations, he warned. The regulation is set to have a significant impact on businesses, change the investment landscape as we know it, and is likely to give rise to a burgeoning green fintech ecosystem, he said.

Portuguese fintech industry

A look at the Portuguese fintech ecosystem shows that lending and credit is currently the largest fintech segment in the Portuguese fintech industry, with 14 companies. Lending is followed by payments/money transfers with 11 companies, insurtech and blockchain/cryptocurrency, both with 10 companies each, and regtech and cyber security with eight companies.

Wealth management and environment, social and governance (ESG), as well as property are at the bottom of the list, with seven and three companies respectively.

A total of 69 fintech companies were registered in Portugal.