Global investment doubles for UK’s fintech sector | N’Gunu Tiny
Fintech companies in the UK continue to attract global investment at record-breaking levels. Figures from KPMG’s Pulse of Fintech report show that global investment doubled in 2019, compared with the year before. So, why are investors still pouring money into this crucial tech sector?
Why is the UK’s fintech sector so strong?
Data shows that the UK fintech sector’s momentum stands apart from the rest of the world, which recorded a dip in investment figures from 2018 to 2019. Around $48.5 billion (£37 billion) flowed into British fintech companies last year, and the number of deals finalised stands at a six-year high.
Furthermore, the UK is responsible for the top 10 fintech deals in Europe and received more than 80% of the continent’s total investment amount of $58 billion. In 2019, we saw the largest funding round in the UK’s history, with Softbank investing $800 million into Greensill, an online lender. Other notable deals included for Monzo, Oaknorth and Starling Bank. Eight new unicorns were also created when the likes of Sumup and Trainline reached $1 billion in value.
Cross-border transactions also stayed buoyant in 2019, regardless of the many geopolitical issues facing global investors. The value of these transactions was more than $50 billion over 138 deals.
Scaling and expansion priorities for fintech companies
As the UK fintech sector continues to mature, we’ll see start-ups concentrating on expansion and scaling. Once niche companies will expand their services and their global reach, thus bringing them to the attention of investors around the world.
I think it’s fair to say that traditional financial providers are under increased pressure as they scramble to match start-ups and disruptors in offering what consumers want. And consumers are clear on what they do want — accessible, easy to use financial applications that they can manage on their mobile devices.
Data from Tech Nation and Dealroom also shows that venture capital funding doubled from 2018’s figure, to reach $5.4 billion in 2019. This is more than any other country in Europe and is further evidence of the UK fintech sector’s strength. This funding boom will continue through this year, with three major online banks actively seeking investment. Monzo is looking for £100 million from investors, and Starling has already completed a funding round worth $60 million. Revolut is also looking for investment of $500 million.
The UK is set to remain the world’s leading fintech hub, thanks to its combination of flexible regulatory decisions, long-term financial experience and plethora of digital tech talent.