UK fintech investment is booming as the UK prepares for Brexit
Global investment in fintech fell, however, by more than a quarter in 2019 to $35.7bn, owing to a sharp fall in funding to Chinese fintechs.
Venture capital and private equity investment into UK fintech firms soared 38 per cent in 2019, up from $3.6bn in 2018, hitting a new record of $4.9bn, according to new research from trade body Innovate Finance.
Of the 10 largest fintech deals in Europe in 2019, the vast majority were from UK firms. These included Greensill Capital ($800m, UK), N26 ($470m, Germany), Klarna ($460m, Sweden), WeFox ($235m, Germany) and Checkout. com ($230m, UK).
London unsurprisingly remains the leading centre of fintech in the UK, receiving 88 per cent of all investment representing 78 per cent of all deals, despite a big push to improve the budding of fintech ecosystems across the UK and not just in London.
European fintech continues to accelerate too, rising 49 per cent to $8.5bn of investment. Europe’s major fintech ecosystems in the UK, Germany, France and Sweden all attracted record investment in 2019.
Global investment into fintech fell overall as investment in China slumped a whopping 93 per cent, from $26.0bn in 2018 to $1.8 bn in 2019. Alarming figures but slightlly misleading without accounting for Ant Financial’s jaw-dropping $14bn record fundraising in Q2 2018. Indian FinTech investment reached $3.8 billion, bringing it to third in the world, with Paytm’s $1.7 billion fundraise.
The US retains the lead among global fintechs with an investment of $16.3bn across 1,095 deals in 2019. This represents a 23 per cent uptick from 2018's numbers.
Freddy Kelly, CEO and co-founder of fintech Credit Kudos, says the UK being the first to introduce open banking has played a key role: “...in large part because this has led to major growth in partnerships and engagement between fintechs and large organisations, which is crucial to the ongoing success of fintech in the UK.”
“Certainly Brexit will bring challenges this year, however, we're only just scratching the surface of these collaborations and so in 2020 I believe we’ll see many more successful partnerships coming to fruition and continued high levels of investment as a result.”