The UK’s fintech scene saw a record year for investment in 2021, exceeding $11.6 billion – a 217% increase from 2020.
Industry body says fintech sector is reaching new levels of maturity
But despite the sector recovering from the pandemic, which saw investment figures stagnate last year, the report warns the UK is still lacking growth capital.
The data was collected and released by Innovate Finance, the industry body representing the UK fintech industry.
The report outlines how the majority of funds backing UK companies went into early or late stage rounds, with a smaller share of funding at the growth stage level. This is roughly commensurate with the rest of the world, however, with the majority (61%) of all global capital invested in later stage growth funding.
The UK was second only to the US for fintech investment. The world’s biggest economy saw $46 billion in fintech capital last year. India ($6.3 billion), Germany ($4.4 billion) and Brazil ($3.8 billion) rounded out the top five.
The data shows that the UK is far and away the most attractive option for fintech investment in Europe, with the UK representing nearly half (45%) of all the $24.3 billion invested across the continent in 2021.
The record investment figures follow the release of the Kalifa Review at the start of 2021. The Review set out recommendations and a roadmap for the continuing growth of the sector through the collaboration of industry, government, and regulators.
Janine Hirt, CEO of Innovate Finance, says: “Fintech is delivering on all the biggest global trends and needs, including business productivity, consumer behaviours, financial wellness and inclusion, climate change solutions and cybersecurity – which is why it is such a magnet for investors.
“The UK Government and regulators have been quick to implement many of the investment and listings reforms recommended by the Hill and Kalifa Reviews, which make the UK even more attractive for global capital, and provide the basis for far greater investment by UK institutional investors.”
