UK is the winner in European fintech funding

Perhaps this news will perk up those England supporters who are living with defeat to Italy at Euro2020, especially if they also happen to be fans of the fintech industry. The UK Fintech State of the Nation report from Innovate Finance shows that London “has cemented its position as the fintech capital of Europe,” despite the double whammy of a global pandemic and Brexit.

According to the data in the first half of 2021, the UK fintech sector raised $5.7bn. This is 34% higher than the $4.3bn raised in 2020 and breaks the 2019 record of $4.6bn.

Who benefited from this rush to invest in UK-based fintechs?

SaltPay and Checkout.com attracted the two largest deals made this year, with $500 million and $450 million respectively. At the moment these are the biggest fintech investments ever in the UK. SaltPay is focused on building a better payments system for merchants, whilst Checkout.com is a global payments platform aimed at offering more payment methods and currencies for online businesses. They’re similar but different, and it is worth noting that both aim to make life easier for merchants.

Indeed, ‘payment’ platforms appear to be dominating the sector here. But challenger bank Starling also got a hefty influx of funds ($376m) and crypto trading platform Blockchain.com received $300m. There has also been significant interest in more niche fintechs, such as Smart Pension, a pension and payroll tech provider, which received $230m, and PayFit, a platform that simplifies and automates payroll and HR processes for small and medium-​sized businesses, raised $107m. Credit-scoring specialist ClearScore raised $200m, another sizeable investment,

In 2021 the number of firms making deals of above $100m also rose from 10 in 2019 to 13 in the first half of 2021, so we can expect that figure to be much higher by the end of this year, and it will be interesting to see by just how much it grows.

Of course the USA is still ahead of the UK, but it is the only country that is. The report shows the levels of support for those other countries that come closest to the two leaders during the same time period: Brazil (40 deals and $3bn), Germany (56 deals and $2.5bn) and India (132 deals and $2.2bn).

Janine Hirt, CEO of Innovate Finance, commented: “Fintech is one of the fastest-growing sectors of our economy and has a vital role to play in the UK’s economic and business recovery. It is hugely encouraging to see evidence of this resilience and growth, particularly in light of the uncertainty and challenges brought on by 2020. Both the flow of capital and a wide talent pool are essential to maintaining the sector’s strength, and we remain committed to supporting efforts in these vital areas.”

You can read the full report here.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s