Finch Capital's €10m Investment In Big XYT and the State of FinTech in 24/25

In the latest episode of FinTech Focus TV, Toby Babb hosts Eugénie Colonna d’Istria, Investor at Finch Capital, for a compelling discussion about the present and future of FinTech. Covering everything from venture capital strategies to the evolving trends in technology, Eugénie’s insights shed light on the critical factors shaping the sector. The conversation also highlights the essential role of talent in driving innovation and growth, a focus central to the work we do at Harrington Starr, a FinTech recruitment business connecting top talent with leading organisations.

Finch Capital’s Unique Approach to Venture Capital

Eugénie begins by introducing Finch Capital’s distinctive investment philosophy. As a venture capital firm specialising in FinTech and broader business technology, Finch Capital focuses on Series A and Series B investments. These funding stages typically target companies with established product-market fit, seeking growth capital to scale their operations. Finch Capital’s involvement, however, goes beyond financial support.

Unlike passive investors, Finch Capital takes an active role in the growth of its portfolio companies. Eugénie explains that the firm adopts a partnership approach, working closely with leadership teams to refine strategies and tackle challenges. This hands-on involvement enables Finch to deliver both financial backing and strategic expertise, creating a collaborative environment that fosters success.

One recent example of this approach is Finch Capital’s €10 million investment in Big XYT, a company specialising in high-frequency trading data solutions. Eugénie describes Big XYT as a "hidden gem," noting its reputation for processing and cleaning complex datasets with exceptional efficiency. The investment not only reflects Finch’s discerning eye for opportunity but also underscores its commitment to supporting technology-driven businesses poised for growth.

The State of FinTech in 2024

Eugénie’s commentary on the State of FinTech Report 2024 provides a comprehensive overview of the industry’s current status and future potential. The report highlights a challenging funding environment across Europe, with overall investment volumes down compared to previous years. However, it also reveals encouraging resilience in the mergers and acquisitions (M&A) market. Transactions under €500 million, in particular, have remained dynamic, signalling sustained activity in the middle market.

The UK continues to lead Europe in FinTech funding, capturing around 65% of the region’s investments. Eugénie attributes this dominance to London’s well-established FinTech ecosystem and recent pension reforms, which are expected to drive further investment into the sector. Despite this strength, the market faces challenges, especially with larger exits exceeding €500 million. Eugénie notes a bottleneck in this segment, where companies like Klarna and Revolut struggle to find suitable exit opportunities, putting pressure on early investors seeking returns.

Despite these obstacles, Eugénie expresses optimism about the future. She highlights the growing activity of European acquirers in the M&A space, a trend that reduces reliance on US buyers. Furthermore, she anticipates a revival in IPO activity as market conditions stabilise, providing new avenues for growth and innovation.

The Shift Towards B2B FinTech

One of the most notable trends discussed in the episode is the shift from B2C to B2B FinTech. While B2C solutions such as neo-banks and consumer lending platforms have dominated the sector in recent years, B2B innovations are now taking centre stage. Eugénie explains that this transition reflects a growing demand for technologies that modernise financial institutions from within.

B2B FinTech focuses on providing infrastructure solutions for banks, asset managers, and insurers, enabling them to streamline operations, reduce costs, and improve efficiency. Companies like Big XYT exemplify this trend by offering niche, high-value solutions tailored to the needs of institutional clients. As FinTech evolves, Eugénie predicts that B2B companies will become increasingly critical to the sector’s growth, addressing complex challenges with specialised expertise.

Technology as a Catalyst for Efficiency

Throughout the episode, the conversation frequently returns to the importance of technology in driving efficiency and competitiveness. Eugénie highlights Big XYT’s innovative approach to handling high frequency trading data, emphasising how its proprietary technology enables the company to process and clean large datasets with unparalleled accuracy and speed. This capability not only enhances operational efficiency but also gives Big XYT a significant competitive edge in its niche market.

Eugénie also touches on broader technological trends, including the rise of artificial intelligence (AI). While AI has generated significant excitement, Eugénie cautions against overestimating its immediate impact. She emphasises the importance of quality data and robust processes, noting that AI’s effectiveness ultimately depends on the foundations upon which it is built. For FinTech companies, adopting technology that delivers measurable results remains a key priority.

Sustainable Growth and Evolving Investor Expectations in Financial Tech

A central theme of the discussion is the shift in investor expectations from "growth at all costs" to sustainable growth. Eugénie explains that today’s investors are increasingly focused on companies that demonstrate financial discipline, operational efficiency, and a clear path to profitability. This evolution reflects a more mature approach to investment, prioritising stability and resilience over aggressive expansion.

Eugénie advises FinTech companies seeking funding to focus on building strong financial foundations and adopting a disciplined approach to scaling. While growth remains essential, it must be achieved in a way that aligns with market conditions and long-term objectives. This balanced approach not only meets investor expectations but also positions companies for sustainable success in an increasingly competitive landscape.

The Role of Teams in Scaling FinTech Businesses

Eugénie stresses the importance of strong teams as a cornerstone of success in FinTech. Venture capitalists like Finch Capital place significant emphasis on the capabilities and cohesion of leadership teams when evaluating potential investments. A team’s track record, adaptability, and ability to execute are often decisive factors in securing funding.

At Finch Capital, assessing a team’s dynamics is a critical part of the investment process. Eugénie explains that complementary skill sets, shared vision, and effective collaboration are essential qualities for navigating the challenges of scaling a business. For companies looking to attract investment, showcasing a cohesive and experienced team can make a significant difference in their ability to secure backing.

Looking Ahead to FinTech in 2025

As the conversation shifts to the future, Eugénie shares her predictions for FinTech in 2025. She believes the industry is poised for renewed growth, driven by innovation and the increasing adoption of advanced technologies. However, she emphasises that success will require strategic planning, disciplined execution, and a focus on quality over quantity.

Eugénie identifies several areas of opportunity, including B2B innovations, AI-driven solutions, and technologies that enhance operational efficiency. She also highlights the importance of understanding market dynamics and aligning business strategies with investor priorities. For FinTech companies and recruitment firms like Harrington Starr, these trends present an opportunity to play a pivotal role in shaping the industry by connecting top talent with innovative organisations.

The Critical Role of Talent in FinTech’s Evolution

Talent remains a central theme in the episode, underscoring its importance in driving innovation and growth within FinTech. Eugénie’s insights highlight the need for companies to recruit individuals who align with their vision and possess the skills necessary to navigate an evolving industry. This emphasis on talent is particularly relevant for us at Harrington Starr, a FinTech recruitment business committed to helping organisations build high-performing teams.

Eugénie’s discussion of team dynamics reinforces the value of a tailored approach to Financial Tech recruitment. Whether identifying leaders capable of guiding a company through growth challenges or sourcing specialists to develop cutting-edge technologies, having the right people in place is essential to achieving long-term success.

The Implications for FinTech Recruitment

For Harrington Starr, the insights shared in this episode underscore the critical role of recruitment in the FinTech industry. As companies grapple with increasing competition and technological advancements, the ability to attract and retain top talent becomes a key differentiator. Harrington Starr specialises in connecting businesses with the professionals they need to thrive, providing bespoke solutions that address the unique demands of the FinTech sector.

Eugénie’s emphasis on strong teams and sustainable growth aligns closely with Harrington Starr’s mission. By helping clients build teams that drive innovation and efficiency, Harrington Starr plays a vital role in supporting the industry’s evolution.

Conclusion

This episode of FinTech Focus TV offers a comprehensive exploration of the factors shaping the future of FinTech. Through her insights, Eugénie Colonna d’Istria provides a detailed analysis of industry trends, from the shift towards B2B innovations to the increasing importance of sustainable growth and technology-driven solutions.

For FinTech companies, investors, and recruitment firms, the discussion highlights key strategies for navigating a dynamic and competitive landscape. By focusing on quality, building strong teams, and leveraging technology, businesses can position themselves for success in the years ahead.

As a FinTech recruitment business, Harrington Starr is dedicated to helping organisations achieve their goals by connecting them with the talent they need. This episode serves as a reminder of the pivotal role that recruitment plays in fostering innovation and driving growth within the FinTech sector. To gain deeper insights into the industry’s future, tune in to this engaging episode of FinTech Focus TV.