UK Fintech Investment Sector Marks 2021 A Record Year

2 years ago

Aerial panoramic view of The City of London cityscape skyline with metropole financial district modern skyscrapers after sunset on night with illuminated buildings and cloudy sky in London, UK

The UK Fintech sector has seen tremendous growth over the past few years. The trend continued in 2021 as well with a huge growth rate of 207% as compared to 2020. The annual fintech investment in the UK recorded more than $11.6bn investment in this sector. The record investment places UK on 2nd place. The US leads the sector with $46bn investment, according to figures presented by Innovate Finance, which is the UK fintech industry body.

The UK has been able to lead the European countries with a share of half of the total investment. Overall, $24.3bn were invested across all europe. Over 713 deals were recorded in the UK which represents the 11% of all global deals which were 6,495. According to the Innovate Finance CEO, Janine Hirt, ” There is now a clear roadmap for strengthening fintech in the UK, and both fintechs and investors are taking note of that”. He also stressed that the UK had always been a leader in this sector. The new regulatory framework will further cement the position of UK in this industry.

However, another important point to note here is the investment attracted in other parts of the UK as well. As London has always been a hub for fintech industry. However, in 2021, investments in other areas saw an increase as well. The total investment outside of London and South East rose from $206m in 2020 to $696m in 2021. This is a 237% increase as compared to 2020 figures.

The government is taking fintech industry very seriously. That’s the reason they have implemented new regulation across the country to make UK an attractive fintech market. It recommends measures to provide more support to fintechs which are on growth state. Similarly, Khalifa Review, a report recommends ways to make the UK attractive destination for Initial Public Offering.

Among the top five deals in the UK were from Revolut, Monzo, Copper, Checkout.com and Starling. The increasing investment in this sector across all UK is a positive sign. Now it indicated that fintech sector in not limited to London only but growing its roots across all UK. The pandemic has further strengthened the importance of fintechs in the UK. Now 8 out 10 Brits are using fintech products. It is equally important both for the UK economy and society.

Janine Hirt, CEO of Innovate Finance further said, ” Our FinTech sector is reaching new levels of maturity, and investors are responding to the growing demands for the products and services our entrepreneurs are able to provide. We are on the right trajectory in terms of levels of funding and now its time to also properly address the funding gap for underrepresented founders, if we are to create a truly substantial and forward-looking sector.”

Lord Gerry Grimstone also seems happy and positive about the prospects of the FinTech industry in the UK. He said, ” 2021 was first-class year for UK investment. We hosted the Global Investment Summit, which secured nearly £10bn investment into our industries of the future.” He also told that the fintech ecosystem in the UK was world-class and business environment in the UK was welcoming. This is really a fantastic achievement for the UK and we look forward more to come in the future as well.