European fintech M&A is enjoying a resurgence, powered by tactical acquisitions and attractive deal prices, with the trend expected to continue in 2026 as acquirers capitalise on new technology like stablecoins, embedded finance, and AI becoming more mainstream, experts say.
Figures show that the value of deals for $100m-plus transactions hit $3.9bn in H1 2025, across Europe, nearly double the total recorded for all 2024, according to data by investment bank Artis Partners based on PitchBook figures.
According to Artis Partners, acquirers are focusing on profitable or close to profitable fintechs generating between £50m and £100 in annual revenues.
While AI and stablecoins have captured much attention this year as fintechs experimented with the new technologies, a look at some of the fintech M&A deals in the UK this year reveals they run across a broad gamut of sectors.
2025 deals
In 2025, fintech deals include Lloyds acquiring fintech Curve in a cut-price deal; SME lender Allica Bank buying embedded payments startup Kriya; Starling Bank buying accounting startup Ember; payments startup Banked acquiring Nick Candy-backed fintech VibePay and London-listed IG Group acquiring investment app Freetrade.
Meanwhile, activity around stablecoins has been heating up, underscored by Visa and Citi’s investment in BVNK, among several stablecoin deals this year.
Are we seeing the return of European fintech M&A?
Shah Ramezani, co-founder and CEO, stablecoin startup Noah, says fintech M&A is picking up and will continue to do so, driven by stablecoins and AI becoming more mainstream.
More broadly, Ramezani says acquirers are not looking to make acquisitions for headline growth but are instead eyeing up assets that remove regulatory friction, reduce compliance and speed entry into new markets.
Jay Wilson, a partner who focuses on fintech investing at VC firm AlbionVC, says that M&A activity is seeing an uptick because of fintech assets being attractively priced.
Like Ramezani, he says acquirers are making purchases for tactical reasons.
Also agreeing with Ramezani is Louise Grzasko, partner, Osborne Clarke, who said regulation and investor confidence are two key drivers of fintech M&A.
Grzasko said: “Regulation has been a catalyst for some deals, with smaller firms seeking homes in larger organisations which are better able to manage compliance requirements.
“Elsewhere, growing investor confidence is driving strategic buyers, who are focused on buying capabilities to build out their businesses and accelerate growth. In some cases, there’s also an increasing realism on the part of vendors when it comes to price, now that multiples have stabilised below 2021 highs, which is leading more vendors to sell>”
Rise of embedded finance
Farah Ariyana, industry strategist, fintech consultancy 11FS, highlighted the rise of embedded finance as a key driver of M&A activity.
She said: “Banks and scale-ups are acquiring fintechs that help them embed more financial services directly into their channels with the aim of accelerating the shift toward integrated, more efficient platforms.
“This is vital for future success as customers increasingly expect relevant financial services at the point of need, rather than through scattered, standalone products.”
Janine Hirt, CEO, Innovate Finance, picked up on the recent uptick in UK fintech M&A activity.
She said: “The primary driver is likely the commitment to continue delivering new products for customers, while remaining competitive. Instead of the costly and time-consuming process of building these in-house, they are choosing to acquire smaller, innovative teams with proven technology stacks.
“The consolidation we are seeing is a sign of strength, highlighting not only the robustness of the UK fintech market, but also signalling a strong belief in the long-term value of the ecosystem.”
Tactical acquisitions
Wilson says: “Payments and lending deals remain largely tactical consolidation rather than strategic shifts.”
Johnnie Martin, investor, UK VC firm Augmentum, says that as the fintech industry reaches a level of maturity, there are more scaled firms with the balance sheet power and operational know-how to carry out acquisitions.
Gary Prince, CEO of fintech Silent Financial Limited, said acquisitions appeared to be focused on two areas: industry consolidation and acquiring troubled businesses, like the Curve deal.
He added:” The investment market is still extremely tough, with a few exceptions and many firms are now struggling to secure their next rounds of funding as their drive to breakeven and profitability has taken longer than originally forecast.
“There are likely to be many more ‘darling’ fintechs acquired very cheaply as they run out of money.”
Are some fintech sectors overvalued and hard to exit?
Ramezani says it is a contrasting market. He says previously highly valued consumer finance fintechs and digital banks face a challenge of getting buyer interest at similar valuation levels in today’s market, while infrastructure and compliance-focused companies tend to trade more on predictability and long-term fundamentals.
But Martin points out that companies with “robust fundamentals and healthy levels of profitability” are able to command strong buyer interest and healthy multiples to exit.
Prince points out that highly valued fintechs need to satisfy the markets, not private shareholders, if they go public.
He added, “We have seen how sentiment can turn very quickly. Revolut is valued at almost half of HSBC, yet its profits are 1/25. Once the business is public, the market will determine the business’s valuation, not private investors.”
Grzasko says: “Those businesses which are not yet profitable or near-profitable and which lack regulatory maturity, in particular, are likely to face the greatest challenges on exit, with longer processes, greater scrutiny and pressure on valuation.”
Ariyana says most buyers are focused on stable revenue, as opposed to high-growth fintechs.
She said: “Most M&A buyers are now focused on mid-tier fintechs with stable revenue or profitability rather than high-growth, high-burn startups. They are looking for fintechs that plug solidly into their business models and can contribute revenue immediately.”
M&A fintech trends for 2026
Wilson says in 2026 M&A will focus on product additions, rather than geographical expansion, with Open Finance, the sharing of financial data with third-party service providers through API, driving tie-ups.
Prince says that M&A activity is likely to increase, as fintechs face the “difficult challenge” of raising their new funding rounds and will look for a “friendly larger partner”.
Ramezani said there will likely be more consolidation in areas like KYC and AML, more cross-border deals, and “distressed M&A” as firms which raised at high 2021 valuations reach the end of their runway.
Martin said: “We are likely to see more acquisitions focused on bringing specialist teams or proprietary tech and data to the acquirer as fintechs continue to focus on building out more AI capabilities at scale.”
Grzasko said that 2026 will continue on a path to quality and security.
She said: “Businesses demonstrating operational resilience, a clear regulatory footing, transparent deployment of AI, and scalable business models will sustain stronger buyer interest.
“An ongoing focus on efficiency will drive continued interest in AI-focussed fintechs, which are likely to benefit from premium valuations.”
Ariyana said embedded finance is likely to be a big M&A trend for 2026.
She said: “We expect to see embedded investing rise, following embedded payments and lending, which are starting to mature. As embedded channels are already driving significant sales for payments and lending, offering investment products is a logical next step.”
