UK fintech investment continues to grow one year after Brexit

By Moriah Costa on Tuesday 1 August 2017

Alternative LendingSavings and Investment

Despite uncertainty about how Brexit will play out, investors are confident in UK’s fintech sector.

Despite uncertainty about how Brexit will play out, investors are confident in UK’s fintech sector.

Investors feel positive about the future of the UK fintech sector, despite uncertainty about the single market and freedom of movement after Brexit, according to data from KPMG.

The professional research firm’s latest Pulse of Fintech report found that the country had a six-quarter high investment of $1.4bn (around £1bn) in fintech funding in the second quarter of 2017, $1bn (£7.6m) more than in the first quarter.

Confidence was up globally as well.

Total fintech investment around the world doubled quarter over quarter to $8.4bn, compared to $3.6bn in the first quarter. The increase was largely driven by M&A investment, with $5.9bn in deals.

Global venture capital funding was down with just over $2.5bn raised by fintech companies in the second quarter.

“Fintech investment has made a comeback this quarter – a sign of renewed investor intent – particularly in the US and Europe," said Ian Pollari, global co-Leader for fintech, and a partner for KPMG Australia. "Corporates are increasingly accounting for significant amounts of fintech investment – a trend that isn't likely to let up given the need for financial institutions to digitize the customer experience, become more cost efficient, and find new sources of earnings growth."

Fintech investment in Europe was at a four quarter high, with $2bn, but still below the fourth quarter of 2015, when investment was at $5.8bn. Deal volume declined from 110 to 90 quarter over quarter, but the median VC deal size was higher than last years, at $15.9m.  

In Asia, investment was steady with $760m over 51 deals, compared to $790m across 56 deals in the first quarter.

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