UK Fintech Investment Hits Record Level

INVESTMENT in UK fintech has hit record levels, keeping the UK in the top three globally for venture capital investment into the sector, behind China and the US.

$3.3bn (£2.6bn) was invested into the UK’s fintech industry in 2018, an 18 per cent rise, according to figures from industry body Innovate Finance.

This comprised $1.6bn of private equity investment – a 57 per cent year-on-year increase – and $1.7bn of venture capital (VC) funding, which was a slight decline from the previous year.

UK fintech Revolut’s $250m fundraising ranked among the top 10 largest global VC deals of last year, while Monzo, EToro, Liberis and BitFury were also among the UK’s top deals, each raising over $80m.

Challenger banks took the lion’s share of VC investment at 27 per cent of the total, while personal finance and wealth management took 19 per cent, alternative lending and financing 18 per cent, and blockchain and digital currencies 10 per cent.

The UK remains a competitive investment destination, with half of investment flows coming from overseas, largely North America and Europe.

It still has diversity issues, however, with just six per cent of deals having a female founder, representing only three per cent of capital invested.

London is still at the heart of the fintech scene in the UK, with more than 80 per cent of VC-backed start-ups headquartered in the capital and claiming over 90 per cent of capital invested.

“It is very encouraging to see that investment continues to grow in the UK fintech sector, reaffirming its position as a leading global financial and technology sector,” Charlotte Crosswell, chief executive of Innovate Finance, said.

“The UK has a unique position across financial services, technological innovation, regulators and government which all play a crucial role in this impressive growth journey.

“However, we should not be complacent as new challenges lie ahead; we must focus on growing our talent and capital pipeline across the UK, to ensure sustainable and inclusive growth in future.”

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