The UK fintech sector has started the year with renewed confidence, raising $2.9bn (£2.5bn) in the first quarter – a whopping 331 per cent rise year-on-year.
Figures from trade body Innovate Finance have revealed that fintech investment in the first three months of 2021 was 153 per cent higher than in the fourth quarter of 2020. This was achieved through 117 deals in the first quarter, of which six were $100m and over, nearly matching the seven reached in total in 2020.
Some of the largest fintech deals included: Checkout.com raising $450m, Starling Bank $376m, Blockchain.com $120m initially and then $300m, Rapyd’s $300m deal and PPRO Financial raising $180m initially and then $90m.
2021 investment to date also represents 69 per cent of the total amount invested in the whole of 2020. This shows that investors are quickly becoming less risk-averse and returning to, if not surpassing, pre-pandemic levels of investment.
The start of the year has also seen an increasing number of UK fintechs signal their plans for initial public offerings (IPOs).
These listings are set to add to the maturing status of the UK fintech sector. P2P lending platform Assetz Capital is one such fintech that has announced plans for an IPO.
“Following a tough and turbulent year in 2020, it’s brilliant to see the speed and vigour with which investor confidence has returned and the first quarter investment figures for our fintech sector look very encouraging,” said Charlotte Crosswell, chief executive of Innovate Finance.
“It’s clear that the appetite to fund high-growth, ambitious businesses is back, and investors are ready to put capital behind UK fintechs that are now so vital to our economic and business recovery.
“Fintech is the fastest growing sector of our economy, and these latest figures show that despite barriers along the way, capital will always follow great ideas – and the UK is full of them.
“We should be proud of the sector’s performance, and take the first quarter trends as a very positive signal for the rest of the year.”
The strong first quarter investment figures follow the Kalifa Review, which set out recommendations for the future growth of the sector, and provided a roadmap to ensure long-term, sustained investment.