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UK Fintechs Received $9.1bn in Investment in H1’22 Despite 81 Less Deals Than H1’21

New data released by Innovate Finance, the industry body representing the fintech community in the UK, has revealed the global fintech investment trends from the first half of 2022.

The total capital invested into fintech globally reached $59billion in the first half of the year – flat year-on-year compared to 2021. The capital was spread across 3,045 deals – which is slightly fewer than 2021 which saw 3,401 deals in the first half of the year.

The global slowdown comes with some exceptions including the UK which recorded a 24 per cent year-on-year increase from 2021. UK based fintechs received $9.1billion in investment spread across 294 deals compared to $7.3billion across 375 deals in the first half of 2021.

Some countries have seen notable drops in investment in the first half of 2022 including Mexico, Netherlands, South Korea, and China, all falling down the global rankings.

The value of the top five biggest deals globally in the first half of 2022 was $5.0billion, with Checkout.com, one of the top five from the UK. The largest deals from highest to lowest were for FNZ ($1.4billion), Trade Republic ($1.2 billion), Checkout.com ($1billion), Ramp ($748million) and Coda Payments ($690million).

Overall, the US received the most investment in the first half of 2022, bringing in $25billion in fintech capital, with the UK firmly in second place with $9.1billion, rounded off by India ($3.9billion), Germany ($2.4billion) and France ($2.3billion).

Industry Views on UK fintech investment 
Janine Hirt, CEO at Innovate Finance
Janine Hirt, CEO of Innovate Finance

Janine Hirt, CEO of Innovate Finance, said: “It is fantastic to see that UK fintechs are continuing to secure outstanding levels of investment – this is a testament to the strength of our ecosystem, including our innovative entrepreneurs and founders, strong and diverse talent pool, and a supportive government and regulatory framework.

“It is critical that we now keep up this momentum. The UK is currently receiving more investment in fintech than all of Europe, second only in the world to the US. We must continue to work together – industry, government and regulators – to build on this leadership and ensure the UK remains the best place in the world to start, build and scale a fintech business. This will positively impact not only the financial services sector but the entire population of the UK as a whole who will benefit from new, innovative, and more effective products that drive greater financial wellness.”

Economic secretary to the Treasury, Richard Fuller
Economic secretary to the Treasury, Richard Fuller

Economic secretary to the Treasury, Richard Fuller said, “UK fintech is a fast-moving and exciting sector and through their innovative approach firms are driving the government’s vision to embrace new technology and ideas – helping to grow the economy and widen consumer choice.

“It’s great to see that the UK remains Europe’s leading hub for fintech – only second to the US globally – with almost half of all of European fintech unicorns based in the UK.”

Rori Cadavieco, GM EMEA, at Jeeves
Rori Cadavieco, GM EMEA, at Jeeves

Rori Cadavieco, GM EMEA, at Jeeves, commented on UK fintech: “While the country’s economic backdrop remains challenging, the performance of the UK’s fintech market does not come as a complete surprise. For many years, it has demonstrated its strength and resilience in the face of adversity and market turbulence and has reinforced its ability to attract the world’s best talent. After all, the UK is the driving innovation in open banking, payments and crypto.”

“While we cannot predict how the ecosystem will continue to perform, it’s important for the UK’s economic prosperity that we maintain momentum. The industry, government and regulators must come together and plan ahead to ensure a steady stream of investment and create a space where innovation can flourish. At a time when VC funding and loans are slowing, we must empower UK fintechs to find suitable financing alternatives that allow them to grow and invest in talent and resources, without needing to fret about cash flow. To date, reliable and sustainable financing has allowed the fintech market to be world-leading, and so our innovative businesses will need our support now more than ever.”

Daumantas Dvilinskas, CEO and co-founder, TransferGo
Daumantas Dvilinskas, CEO and co-founder, TransferGo

Daumantas Dvilinskas, CEO and co-founder, TransferGo, looked at what the UK must do in order to surpass the US. He said: “In the face of adversity, the UK fintech industry has proven its resilience, but safeguarding this growth and to be able to take the crown of world fintech leader from the US, will require the UK to cultivate an attractive and prosperous environment for overseas talent.

“There’s no doubt that innovation sits at the heart of the UK fintech market’s success but replicating this in the long-term requires diversity of thought and background. As a migrant myself, it’s clear that the government needs to do more to reassure foreign talent that there is a home for them in the UK fintech community. That’s how the market will unlock future growth and innovation.”

So what can be done?

Despite positive figures showing an increase in investment value in the fintech sphere, there are concerns about businesses reaching their valuations, and achieving the desired growth. Last week at Fintech Week London, an industry review was launched to address these problems. Fintech Week London is looking for partners to make their voices heard and explain what they believe is causing this, by taking part in the review. To take part, register your interest at Fintech Week London Review.

Author

  • Francis is a journalist with a BA in Classical Civilization, he has a specialist interest in North and South America.

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