UK retains European fintech crown despite 9pc y-o-y fall in investment
The UK’s fintech sector attracted $4.1bn (£3bn) in venture capital last year, ranking second globally behind the US, new research has found.
Figures from trade body Innovate Finance showed that the UK retained its position as the top-ranking fintech investment destination in Europe, with $4.1bn venture capital and growth private equity invested across a total of 408 deals.
However, this was a nine per cent year-on-year decline in UK fintech investment, compared to a 38 per cent year-on-year increase in deal volume the previous year to a new record of $4.9bn.
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The UK secured just under half of $9.3bn of European fintech investment last year. Germany was the second largest market with $1.4bn of investment across 71 deals, followed by Sweden with $1.3bn of capital raised.
London-based firms attracted 91 per cent of capital invested in UK fintech, receiving $3.8bn across 310 deals. Banking app Revolut secured the largest UK deal ($580m), followed by digital mortgage lender Molo ($343m).
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Globally, fintech investment reached $44bn last year, across 3,052 deals. Total investment increased by 14 per cent from 2019, largely thanks to a strong performance in the US.
The US topped the world rankings with a 29 per cent year-on-year rise in fintech investment to $22bn in 2020.
“Given the tough and turbulent year we’ve experienced, it’s very encouraging to see strength and resilience in the global fintech sector’s ability to raise capital, said Charlotte Crosswell, chief executive of Innovate Finance.
“Now more than ever, we should celebrate the strong position the UK has carved out at an international level. We are a world-leading fintech hub, and as the figures reveal, the epicentre of fintech in Europe – despite the many challenges thrown our way.
“The pandemic has created new barriers for many companies seeking funding, so it is all the more vital that we support our innovative companies to fuel their future success and growth. The upcoming fintech strategic review is a key step on that path that will help to ensure long-term, sustained investment.”
