By Emily Nicolle on 7th February 2018
British firms are outperforming expectations, taking in the second highest amount of VC funding globally in 2017.
The UK fintech sector has overtaken China to rank the second highest globally in terms of total capital raised and deal volume last year, just behind the United States.
According to research from Innovate Finance, venture capital investment in UK fintech firms was up 153 per cent in 2017 compared to the previous year, proving that earlier predictions that VC interest in the UK would fall post-Brexit were false. The UK fintech sector raised a total of $1.8bn across 224 deals, which was the highest volume outside of the US (765).
Of the total VC investment in the UK in 2017, 24 per cent went into challenger banks, followed by money transfer and foreign exchange (21 per cent), alternative lending and financing (17 per cent), and personal finance/wealth management (11 per cent).
We can see this mirrored in the UK’s top two deals of 2017, which went to challenger banking unicorn OakNorth and currency transfer platform Transferwise, both of which raised rounds of over $200m and scored in the top 20 deals globally.
Global VC investment reached $14.4bn across 1,824 deals globally, representing an 18 per cent decrease year-on-year from 2016. In the UK, 54 per cent of investment came from non-domiciled VCs, largely based in North America (25 per cent) and Europe (14 per cent).
Commenting on the findings, Charlotte Crosswell, CEO of Innovate Finance, said: “Our 2017 Fintech VC Landscape report demonstrates that the UK’s fintech sector is cementing its position as a world leader.”
“There is no doubt that London’s position as a leading financial and technology centre is driven by the UK’s focus on policy and talent, allowing us to attract the entrepreneurs and investors that are bringing real, positive change to the world of fintech.”
Earlier today, data provided by research firm Beauhurst showed that the UK has more than doubled its interest from VC firms in 2017, after scoring 23 “megadeals” which received more than £50m in foreign investment backing.
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.