Key take aways
The general market conditions are favorable to further digitization of financial services. Adoption of digital financial services has continued to grow steadily in the past year and key enablers, i.e. consumer acceptance, number of ICT specialists, easiness to start new businesses are evolving positively. However, Belgium should still put specific efforts in decreasing the cost of starting a business and improving cybersecurity.
The Fintech ecosystem in Belgium and Europe is steadily maturing with larger but fewer deals. This is confirmed by the shift from Seed to Series B funding as most represented share of investment by funding round (24%). Significant change can be identified in the top 3 Fintech technologies with a shift from Blockchain & Data analytics to Saas, App and Artificial intelligence and in the most favored business models with a shift from marketplace and crowdfunding to commissioning and subscription business models. In the European ecosystem, Brussels is considered as 10th most important Fintech hub and B-Hive 9th biggest European accelerator in number of deals.
Out of a survey conducted within the B-Hive ecosystem, Fintechs seem to target the banking & insurance sector in priority and see them as potential clients. They see France as most preferred destination for geographical expansion before other European countries such as UK, Ireland and Germany and see the US and Singapore as most interesting expansion options outside Europe. They identify their main challenges as being the difficulty to attract customers and investors and the talent shortage and low collaboration with traditional FS payers.
Cybersecurity in Europe and Belgium shows strong growth expectations until 2023 with 11% CAGR reaching EUR 41 bn by 2023. The UK is the leading country in terms of investments and number of deals, followed by Switzerland. Cybersecurity start-ups tend to favor Saas technologies and subscription business models. In Belgium, the trend experienced in Europe is less visible with lower importance and investment in cybersecurity. However, promising actors (e.g. Seeld, Guard square, Sweepatic) remain part of the ecosystem.