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Global Fintech Investment Fell in 2022, Innovate Finance Reveals

Innovate Finance, an industry body representing the UK fintech community, has revealed that global fintech investment levels fell in 2022.

investmentThe Innovate Finance research detailed how the total investment into fintech globally reached $92billion in 2022. The sum represents a decrease of 30 per cent compared to 2021, in which the industry amassed an investment total of $130billion. The capital invested in fintech in 2022 was spread across 5,263 deals; compared to 6,146 deals in 2021.

The US topped the fintech investment charts in 2022. The country received over $39billion solely for its fintech industry. Globally, the UK received the second-largest total investments in 2022 with $12.5billion.

Fintechs based in the UK collectively received the $12.5billion across 546 in 2022. The total represents a decrease of eight per cent in comparison to 2021, in which the UK received $13.5billion across 583 deals throughout 2021.

Despite the decrease, proportionally, the UK suffered one of the lesser reductions in investment worldwide. London also continued to establish itself as a leading global fintech hub in 2022. The capital received $10.2billion throughout the year, only seeing a decrease of five per cent from 2021.

While the leading countries felt losses, Singapore saw an increase of 41 per cent in investment compared to the previous year. The success saw Singapore rise from seventh to fourth worldwide in regard to investment totals.

The remainder of the top five is completed by India in third with $5.5billion and Germany in fifth with $2.9billion.

Could UK fintech companies struggle?

The global downturn comes at a time of significant economic stress around the world. The likes of rising interest rates have specifically hit a number of industries hard in the UK. Africa-based payments provider Flutterwave was reported by Sky News to be interested in acquiring the embedded banking platform Railsr.

After a successful Series C funding round in 2022, Railsr reportedly may still require intervention by the likes of Flutterwave. News such as this highlights the struggles that UK fintech is experiencing, entering a period of consolidation rather than a complete focus on growth.

With a decrease in the amount of investment in the fintech industry, it appears that fintech companies in the UK may not experience the easiest year to come.

UK fintech continues to thrive despite a global downturn
Janine Hirt. Fintech investment Innovate Finance
Janine Hirt, CEO of Innovate Finance

Janine Hirt, CEO of Innovate Finance, commented on the findings. Hirt explained: “UK fintechs are holding the fort in securing great levels of investment in challenging economic times. This is a testament to the resilience and strength of our sector.

“Our latest report shows that the UK is still receiving more investment in fintech than all of the next 10 European countries combined, and remains second in the world only to the US. We must continue to work together with industry, government and regulators to build on this momentum and maintain the leadership of the UK as a global centre to start, scale and grow a fintech business.

“This is perhaps more important now than ever before as fintech continues to redefine financial services and provide greater financial support and access to consumers during the cost of living crisis.”

Paul Scully, Fintech investment Innovate Finance
Paul Scully, Digital Economy Minister

Paul Scully, Digital Economy Minister, explained how the decrease did not indicate bad news for the sector.

He said: “Despite global headwinds, British fintech firms showed great resilience last year and helped boost the UK’s status as a world leader in tech; delivering jobs and huge benefits for our economy.

“In 2023 we are focusing on maintaining that lead by supporting start-ups, boosting digital skills and making this country an even more attractive destination to found, grow and invest in tech businesses.”

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