UK’s Fintech Sector Reaches Record Level Of Investment


Last year, the investment into the blossoming fintech sector of the United Kingdom broke records as the startups of the country reached a new stage in their growth journey.

According to the data that was published by Innovate Finance today, the private equity and venture capital investment in British fintech increased to an all-time high of $3.3 billion (£2.6 billion), an increase of 18 percent as compared to the levels recorded in 2017.

Significantly, the growth in private equity investment increased to 57 percent to $1.6 billion while venture capital slightly dropped, indicating that the startup scene of the United Kingdom is quickly becoming a scale-up industry.

The UK placed miles ahead of its counterparts in Europe. It raked in nearly five times as that of the $716 million that was reported by Germany for fintech investment in 2018.

Additionally, the United Kingdom continued to be attractive to international investors despite the looming spectre that comes with the uncertainty of Brexit, as 50 percent of its $3.3 billion investment came from overseas, namely Europe and North America.

In 2018, London was home to more than 80 percent of the fintech startups that took in venture capital funding. Overall, it claimed more than 90 percent of the capital invested.

The United Kingdom maintained its position in third globally for overall fintech funding. It comes in behind China and the United States. This was a decline from its achievement in July when British fintech startups had taken in more funding as compared to anywhere else in the world in the first six months of the year.

The chief executive of Innovate Finance, Charlotte Crosswell, stated: “It is very encouraging to see that investment continues to grow in the UK fintech sector, reaffirming its position as a leading global financial and technology centre.”

She added: “The UK has a unique position across financial services, technological innovation, regulators and government which all play a crucial role in this impressive growth journey.”

Challenger banks such as Revolut and Monzo took in the majority of the fintech funding of the United Kingdom in 2018. It snapped up 27 percent of the overall total. This was followed by personal finance and wealth management, alternative lending and financing, and blockchain and cryptocurrencies.

Disappointingly, only six percent of deals last year went to firms with at least one female founder, representing three percent of the $3.3 billion total for 2018. Innovate Finance has called for more to be done to achieve diversity in the tech talent of the United Kingdom.

Crosswell, however, warned: “We should not be complacent as new challenges lie ahead; we must focus on growing our talent and capital pipeline across the UK, to ensure sustainable and inclusive growth in the future.”

The findings were revealed as global venture capital investment in fintech also reached record highs in 2018, hitting $36.6 billion at a leap of nearly 150 percent as compared to the previous year. China’s Ant Financial alone dominated the numbers after it raised $14 billion in the world’s largest-ever single fundraising by a private company.