Fintech has faced waning investor interest over the past few years as hyped sectors such as AI-native and deeptech overtake Europe’s former funding darling. Sifted reports that European fintech’s H1 funding figures show a decline, with €6.2 trillion raised in 2024 compared to 50.9% of the total tech investment.

The shift has left many traditional fintechs scrambling to pivot toward AI‑driven solutions or risk losing capital. Analysts note that the demand for AI‑native products has surged, with investors seeking companies that can integrate AI from the ground up. This pressure is evident in the latest funding rounds, where AI‑focused startups secured the majority of the capital, while legacy fintechs received a smaller slice.

The trend underscores a broader shift in venture priorities, highlighting that innovation in AI and deeptech is now the primary catalyst for growth and return in the European ecosystem. Fintechs that remain agnostic or lag in AI integration may struggle to compete for funding.

The data suggests that the only path forward is to embed AI at the core of product strategy, or face diminishing returns in a market that rewards early movers in the AI wave.