The UK fintech sector attracted $5.7bn (£4.1bn) in investment in the first half of the year, 34 per cent more than the whole amount raised during 2020 ($4.3bn).
Trade body Innovate Finance has revealed that the sector secured 317 deals, breaking 2019’s record year of investment raised ($4.6bn) by 26 per cent.
Today, in terms of funds raised, the UK is second only to the US (940 deals and $26.7bn) and is well ahead of the levels secured by Brazil (40 deals and $3bn), Germany (56 deals and $2.5bn) and India (132 deals and $2.2bn) during the same period.
The most significant investments in the first half of the year came from payment technology firms.
SaltPay and Checkout.com attracted the two largest deals made this year at $500m and $450m respectively. This was followed by Rapyd ($300m), PPRO Financial ($180m), DNA Payments ($140m) and PaySend ($125m).
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Challenger bank Starling Bank ($376m), crypto trading platform Blockchain.com ($300m), pension and payroll providers Smart Pension ($230m) and PayFit ($107m) and credit-scoring specialist ClearScore ($200m) also secured large investments.
The first half of the year also saw 13 UK fintech companies close investment deals above $100m, beating 2019’s record of 10.
“This analysis clearly demonstrates that the appetite among international investors to fund high-growth, innovative firms has never been greater, and is a testament to the UK’s position as a world leader in fintech,” said Janine Hirt (pictured), chief executive of Innovate Finance.
“Fintech is one of the fastest-growing sectors of our economy and has a vital role to play in the UK’s economic and business recovery.
“To have secured record funding – in just six months – speaks to an enduring confidence in UK innovation, as well as our ability to build and scale world-class businesses.
“It is hugely encouraging to see evidence of this resilience and growth, particularly in light of the uncertainty and challenges brought on by 2020.
“Both the flow of capital and a wide talent pool are essential to maintaining the sector’s strength, and we remain committed to supporting efforts in these vital areas.”
The investment figures follow the government-commissioned Kalifa Review, which laid out the roadmap that could lead the UK to the top of the global fintech league table.
This year, many fintechs have announced initial public offerings (IPOs) or future plans to go public, which Innovate Finance said will add to the maturing status of the sector.
LendInvest has filed the paperwork for an IPO on the FTSE AIM market and both Zopa and Assetz Capital have previously expressed plans for public listings.