Endeavor

5 In Times of Crisis, an Opportunity for Fintech Being a city of 70,000 financial experts, Milan has been a relative latecomer to fintech. Up until the mid-2010s, there were only around 40 fintech companies in Milan, while the fintech ecosystems of London and Dublin were already flourishing, with companies like Transferwise and Stripe gaining traction across the world. In the aftermath of the Eurozone financial crisis, Italy entered a prolonged recession. 4 Most banks slashed their innovation budgets, and a frustrated workforce was retained with hardly any salary increases or bonuses in sight. In 2016, PSD2, a European directive on payments clarified regulation around online payments companies in the E.U. Fintech companies were now allowed to make payments on a consumer's behalf without being registered and regulated as a bank. 5 The banking crisis, coupled with the changes in regulation, were enough to convince many banking experts to spin off from their banks and start their own company. 6 Over 80 fintech companies were founded between 2014 and 2019, and the sector tripled in size. Former bankers were well positioned to start fintech companies, because they were grounded in the inefficiencies of the Italian financial markets and knew which ones could be addressed with technological solutions. In 2019, Endeavor Insight identified 113 fintech companies founded or headquartered in the area, who employed over 1,400 people overall. Source: Endeavor Insight. Sample size = 113 entrepreneurial financial technology companies founded in Milan. 30% 20% 10% 0% 2003 2001 2000 1995 NUMBER OF NEW FINTECH COMPANIES FOUNDED BY YEAR The past five years have seen an upsurge in new business activity in the fintech industry in Milan. 2007 2008 2010 2011 2012 2013 2014 2015 2016 2017 2018

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