UK fintech shrugs off Brexit, trumps Germany

By Daniel Lanyon on 30th May 2017

P2P/Marketplace LendingAlternative CreditRobo-AdviceChallenger Banks

Research from Fintech Global shows that despite the Brexit vote investors continue to commit more capital to UK Fintech companies.

UK fintech shrugs off Brexit, trumps Germany

Research from Fintech Global shows that despite the Brexit vote investors continue to commit more capital to UK fintech companies. 

Since the Brexit result many years of uncertainty for markets and teh broader economy have set in to investors' expectations. Quickly shifting news agendas and polling results have been an ongoing feature of Brexit Britain and prompted stock market and currency volatility. The imminent general election has only increased the trend and that is before offical talks begin in three weeks time.

The ‘Brexit effect’ was notable for its hit to investment in the UK’s world-class fintech scene as well with the questions over the City’s competitive edge in the new and uncertain era. Capital investment into fintech fell in 2016 owing to EU referendum uncertainty, but the decline seems short-lived.

Fintech firms  based in the UK have received more than double the overall capital invested into German fintechs  since the start of 2016. In fact, investments grew 81.7 per cent year on year from $284m in Q1 2016 to $516m in the opening quarter of this year, according to research by FinTech Global, a consultancy,

This was at both a higher proportional rate as well as an absolute rate compared to one prime contender for Europe’s financial crown post Brexit; Germany. In the same period investments in Germany, the UK’s main current fintech competitor in Europe, increased by only 42.5 per cent.

Investments, however, in both German and UK fintech companies have hit five-quarter high’s in Q1 2017 with $218m and $516m amount invested, respectively.

Both the UK and Germany raised nearly half of their total respective funding for 2016 in the opening quarter of the year. Therefore, fintech investment in both countries is on track to surpass the value invested last year.

 

UK fintech investments in Q1 was driven by the $101.8m round raised by Atom Bank while Germany’s largest deal went to deposit marketplace start-up Raisin which raised $32m Series C round.

UK’s share of capital going to fintech companies remained relatively stable at just over 70 per cent despite the turbulence of the Brexit vote last year and the headlines that Fintech start-ups are moving to Berlin.

Alongside Atom Bank, marketplace lender Funding Circle also raised in excess of $100m in the first quarter of the year for its SME lending platform.

Marketplace Lending companies have received the most funding in the last five quarters in both countries, and today P2P lender Ratesetter has just annouced it has recieved another injection of cash, led by Neil Woodford and Artemis totalling more than £13m. 

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Companies in this Article:

Funding Circle
RateSetter
Atom Bank
Raisin
Circle