Europe Embedded Finance Business and Investment Opportunities – 50+ KPIs on Embedded Lending, Insurance, Payment, and Wealth Segments - Q1 2022 Update

Europe Embedded Finance Business and Investment Opportunities – 50+ KPIs on Embedded Lending, Insurance, Payment, and Wealth Segments - Q1 2022 Update

Report Description

According to PayNXT360’s Q4 2021 Embedded Finance Survey, Embedded Finance industry in the region is expected to grow by 35.6% on annual basis to reach US$42,310.2 million in 2022.

The embedded finance industry is expected to grow steadily over the forecast period, recording a CAGR of 21.4% during 2022-2029. The embedded finance revenues in the region will increase from US$42,310.2 million in 2022 to reach US$121,508.7 million by 2029.

In Europe, embedded lending is becoming increasingly popular among consumers due to the rising popularity of the buy now pay later lending model. Consumers are increasingly looking for convenient and innovative payments option for online purchases.

BNPL mode of lending is the most popular among consumers due to its affordability and convenience. Some of the key players offering BNPL service include Klarna, PayPal Credit, and Splitit in the region.

Embedded lending is most popular in the United Kingdom compared to other countries in the European region. The United Kingdom is one of the early adopters of embedded lending options for making purchases. Shoppers in the United Kingdom observe retail finance as a convenient way to split the cost of expensive purchases.

Furthermore, the pandemic has also propelled the demand for embedded lending in crucial industry segments across European countries. The trust factor is higher for traditional banks. However, convenience and promptness are the key factors that have helped the embedded lenders compete with traditional banks.

Market players are raising funds to expand their offerings for business lending segment

The business lending segment is offering a significant growth opportunity for embedded lending companies post-pandemic. Market participants are raising funds to improve their offering and expand their foothold in the business lending segment. This will help the lending companies and players in the ecosystem to capitalize on the overall prospects in this market. For instance,

• In December 2020, the United Kingdom-based embedding revenue-based finance platform provider Liberis raised £70 million, totaling the company’s valuation at £200 million. The fund was raised by the company’s old investors, including British Business Investments, Paragon Bank, BCI Europe, and a new investor Silicon Valley Bank.
• The newly raised funds will be utilized to launch new products and enter new markets with high growth opportunities.

With the companies developing new products is expected to result in innovations and improved features in the embedded lending platform.

The embedded insurance landscape is booming in Europe, and countries like the United Kingdom, Germany, and France have made significant contributions to the region's embedded insurance business growth.

To remain competitive in the market and to keep pace with the ever-changing customer requirements, insurers in Europe are modifying their business models and working to improve their distribution channels. Furthermore, with the rising number of new entrants in the region, the European embedded insurance market is soaring. Considerable increases in fresh fundraising rounds are propelling the market to new heights.

According to PayNXT360 analysis, European insurtech start-ups have surpassed the total capital investment of 2020 by more than US$ 1 billion in the first quarter of the year 2021, with a total of nearly US$ 2 billion invested across more than 50 transactions. Over the next four to eight quarters, rising finance activities are likely to raise embedded insurance demand. For instance,

• In June 2021, German digital insurance start-up Wefox has raised a $650 million Series C funding round led by Target Global. Wefox is a digital insurer that specializes in personal insurance products such as home insurance, auto insurance, and personal liability insurance. With the latest fundraising round, the company has reached a total worth of US$ 3 billion.
• In June 2021, Bought By Many, a pet insurance provider based in London, United Kingdom, raised US$ 350 million in Series D funding, totaling the company’s value to over US$ 2 billion.
• Both the companies are planning to utilize these funds to expand their operation across European countries.
• PayNXT360 anticipates continued investment rounds in the embedded insurance industry in Europe over the next four to eight quarters.

The unanticipated market scenario that caused a shift in the payments sector in early 2021 persisted throughout the year. These changes accelerated the development of three broad themes that continue to influence the competitive dynamics within the payment ecosystem across European countries: the rapid rise of e-commerce activities, the proliferation of innovative payment methods, and the development of next-generation payment infrastructure.

The payment industry in Europe is going through a trial phase, and incumbents in the payments market ecosystem must evolve to stay relevant in the industry, as the everchanging demand from clients is making the current system outdated. Moreover, European companies have invested heavily in embedded payment solutions in the past few quarters, resulting in market growth.

Customers are increasingly expecting e-commerce platforms to provide a smooth buying experience. Embedded payment is the solution to this ever-growing client requirements. This also allows the companies to provide value-added benefits to clients and increase loyalty.

Embedded payment providers are capturing niche market segments through partnerships

With the growing competition in the embedded payment market across various sectors, embedded payment platform providers are untapped segments. Embedded payment providers are collaborating with players from niche industries to expand their client base. For instance,

• In December 2021, Netherlands-based payment platform provider Adyen partnered with Canada-based specialty digital imaging retailer Henry's Enterprises Inc. Under this partnership, Adyen will provide payment processing capabilities to Henry's in-store and online commerce channels.

This report provides regional insights into key trends and drivers along with a detailed data centric analysis of market opportunities in embedded finance industry at regional and country level. Region and countries included in this report are:

1. Europe
2. Austria
3. Belgium
4. Denmark
5. Finland
6. France
7. Germany
8. Greece
9. Ireland
10. Israel
11. Italy
12. Netherlands
13. Poland
14. Russia
15. Spain
16. Switzerland
17. United Kingdom

Scope

This report provides regional insights, along with an in-depth data centric analysis of the Embedded Finance industry in Europe, covering 50+ KPIs for each region and country (800+ charts and 650+ tables in all). Below is a summary of key market segments:

Embedded Finance Market Size and Forecast

Embedded Lending Market Size and Forecast

• Embedded Lending by Consumer Segments, 2020 – 2029
-- Business Lending
-- Retail Lending

• Embedded Lending by B2B Sectors, 2020 – 2029
-- Embedded Lending in Retail & Consumer Goods
-- Embedded Lending in IT & Software Services
-- Embedded Lending in Media, Entertainment & Leisure
-- Embedded Lending in Manufacturing & Distribution
-- Embedded Lending in Real Estate
-- Embedded Lending in Other

• Embedded Lending by B2C Sectors, 2020 – 2029
-- Embedded Lending in Retail Shopping
-- Embedded Lending in Home Improvement
-- Embedded Lending in Leisure & Entertainment
-- Embedded Lending in Healthcare and Wellness
-- Embedded Lending in Other

Embedded Insurance Market Size and Forecast

• Embedded Insurance by Industry, 2020 – 2029
-- Embedded Insurance in Consumer Products
-- Embedded Insurance in Travel & Hospitality
-- Embedded Insurance in Automotive
-- Embedded Insurance in Healthcare
-- Embedded Insurance in Real Estate
-- Embedded Insurance in Transport & Logistics
-- Embedded Insurance in Others

• Embedded Insurance by Insurance Type, 2020 – 2029
-- Embedded Insurance in Life Segment
-- Embedded Insurance in Non-Life Segment

• Embedded Insurance by Type of Offering, 2020 – 2029
-- Embedded Insurance in Product Segment
-- Embedded Insurance in Service Segment

Embedded Payment Market Size and Forecast

• Embedded Payment by Consumer Segments, 2020 – 2029
-- B2B
-- B2C

• Embedded Payment by End-Use Sector, 2020 – 2029
-- Embedded Payment in Retail & Consumer Goods
-- Embedded Payment in Digital Products & Services
-- Embedded Payment in Utility Bill Payment
-- Embedded Payment in Travel & Hospitality
-- Embedded Payment in Leisure & Entertainment
-- Embedded Payment in Health & Wellness
-- Embedded Payment in Office Supplies & Equipment
-- Embedded Payment in Other

Embedded Wealth Management Market Size and Forecast

Reasons to buy

• In-depth Understanding of Embedded Finance Market Dynamics: Understand market opportunities and key trends along with forecast (2019-2028).

• Insights into Opportunity by end-use sectors – Get market dynamics by end-use sectors to assess emerging opportunity across various end-use sectors.

• Develop Market Specific Strategies: Identify growth segments and target specific opportunities to formulate embedded finance strategy; assess market specific key trends, drivers, and risks in the industry.

• Get Sector Insights: Drawing from proprietary survey results, this report identifies opportunities across embedded lending, embedded insurance, embedded finance, and embedded wealth sectors.