Research from Fintech Global suggests 2017 is set to be a record year for financial technology firms in the UK thanks in part to Zopa.
While the unfolding Brexit process has added to a list of summer worries for UK investors, those with a stake in the disruptive end of financial services have more reasons to cheer.
The rapidly growing sector is seeing resilient growth, according to data provider Fintech Global, who has found that growth is robust.
The firm’s research found UK fintech had seen growth of CAGR of 18.1 per cent between 2014 and 2016. In 2017 this trend has continued with fintech firms receiving funding of £769m.
One of the largest investments to FinTech companies based in the United Kingdom in Q2 2017 was to P2P lending firm Zopa which received £32m in a series E deal in June.
Last year saw fintech funding in the UK falter in the months leading up to the UK’s referendum on membership of the European Union. The first half of this year saw 16.9 per cent more investment than the first half of 2016. Moreover, the total amount invested in Q2 2017 was more than £50m higher when compared with the same quarter last year.
While the second quarter of 2017 was only a touch higher than Q2 of 2016 in terms of funding, the number of deals has also picked up for the past three months.
Another pertinent trend is the geographical spread of investments within the UK. While London clearly still dominates, receiving the lion’s share of funding, other parts and regions of the UK appear to be the beneficiaries of investments to a greater extent. This is the case in both absolute and relative terms.
In fact, non-London UK received more in the first six months of 2017 than it did in the whole of 2016, representing a 10 per cent increase at £223m versus £199m.
In the first half of 2017 Durham-based Atom Bank raised £83m in Q1 and Altrincham-based Paybreak, which develops retail finance solutions, raised £24.5m in Q2.