Investment in British Fintech Companies Hits Record High
Venture capitalists invested £740 million in UK fintech firms in the second quarter of 2019.
British fintechs secured a record amount of cash from investors in the most recent quarter of 2019, a study by CB Insights has revealed.
This is despite fintechs in the UK facing an increasing amount of pressure from regulators. From April to June, venture capitalists ploughed £740 million into UK fintech firms, which is almost double the investment made in the same period in 2018.
Research firm CB Insights noted that this was due to a number of Britain’s fintech unicorns (companies valued at more than $1 billion), such as Transferwise and Monzo, raising substantial capital.
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This has led to the UK continuing “to lead as the top fintech market in Europe in 2019,” the CB Insights report stated. Challenger banks are also the fastest-growing cohort in terms of fintech, having added more than 30 million accounts customer accounts, the report stated.
Worldwide, challengers have already raised more in 2019 ($2.5 billion) than they did during the whole of last year ($2.3 billion).
Notable deals in the UK including Starling Bank raising £75 million to expanded into Europe this year, and Monzo doubling its valuation to more than £2 billion with a funding round in June.
The fintech sector in Scotland has been particularly busy over the past year. For instance, Edinburgh-based Nucleus Financial listed on the Alternative Investment Market (AIM) in July 2018 and FNZ was valued at £1.6 billion after changing hands in October of the same year.
Stephen Ingledew, chief executive of FinTech Scotland, announced this summer that Scotland is now home to at least 100 fintech businesses.
The increase in fintech investments has also come as regulators look to introduce tougher restrictions across the industry.
In June this year, for example, the Financial Conduct Authority imposed new rules to limit how much cash investors could pour into peer-to-peer loans without having received financial advice.