UK fintech funding takes a 37% hit

Fintechs in the UK saw funding drop by 37 per cent in the first six months of 2023 compared with the same period last year, according to industry trade body Innovate Finance. 

The total cash raised by UK fintech firms was $2.9bn.

As a trend, declining funding volumes is a global one for fintech with 2,500 deals totaling $31.7bn of capital in the second half of 2022, to 1,714 deals worth $27.3bn in the first half of 2023.

Of the 111 of the 199 UK fintech deals taking place in the first three months of the year, £2bn of the total.

Some investors such as Augmentum Fintech have seen notable exits, but are largely choosing to sit on cash over the past twelve months amid a number of macroeconomic woes.

The war in Ukraine, rampant inflation and more have been pushing up bond yields putting pressure on valuations for fintech companies, analysts at Liberum not.

“It is important to build investor confidence in fintech given the necessity of innovative solutions, and at a time when the technology behind these is evolving rapidly,” said Wayne Johnson, CEO & Co-Founder of Encompass Corporation. 

“We must continue to drive game-changing efficiencies for banks, with automation technology, for example, improving processes and output, while ultimately contributing to the UK’s wider aim of becoming a science and technology superpower.”

There have several notable rounds, however, including payments infrastructure fintech Volt, led by CEO Tom Greenwood (pictured), which raised a $60m Series B last month, in which Augmentum participated.