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2019: a blockbuster year for UK fintech investment

·       Fintech investment in the UK grew substantially in 2019 to $48.5bn from $25.4bn in 2018.

·       The UK accounted for 83% of all European fintech funding in 2019.

·       The number of fintech deals by global tech giants increased for the fifth straight year, reaching $3.5bn.

 UK fintech transactions reached a six-year high and defied the global picture where fintech investment fell just shy of 2018’s record with $135.7 billion. The UK accounted for half of Europe’s ten biggest deals and over 80% of Europe’s overall, record setting, fintech funding of $58bn in 2019. 

 Globally, the main theme in 2019 was market diversity – with fintechs and fintech investment expanding across product, sector and geographic borders. In fact, despite various geopolitical tensions, cross-border transactions remained very high with over $50 billion in cross-border M&A deal value across 138 deals. This focus on cross-border transactions will likely continue as maturing fintechs look to grow and achieve scale and the big tech giants look to extend their reach and gain market share in less developed markets.

Miles Celic

 Miles Celic, Chief Executive Officer, TheCityUK, says, “As a world-leading FinTech hub, the UK offers ambitious firms a competitive base for their global growth. The UK FinTech market is showing increasing signs of acceleration, with large-scale deals and confident plans for global expansion gathering real pace. It is encouraging to see the partnership model bearing fruit, providing the right mix of capital, expertise and innovation to propel the financial and related professional services industry forward.”  

 

Anton Ruddenklau

“It’s been another fantastic year for UK fintech. Over the past year, the lines have really started to blur between financial services and non-financial services, with fintech companies helping to bridge the gap – we expect this trend to continue into 2020” said Anton Ruddenklau, Global Co-leader of Fintech, KPMG International. “Some of the biggest deals have been clear examples of investment in fintech solutions that are more focussed on supporting other businesses digital infrastructure and this, in turn, is attracting investors towards the potential for quicker-to-profit models. Just look at how the big tech giants are working with both traditional financial institutions and fintechs in order to seamlessly integrate financial services within their ecosystems, and at how the larger fintechs and financial institutions are looking at ways to broaden their offerings into adjacent areas. There’s also been notable geographical expansion this time around, as the digital banks prove themselves shining examples of the UK’s potential as we embark on life outside of the EU.”

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