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The UK Strengthens its Position as Fintech Investment Leader in Europe

David Paul

,

FinTech For All

Newly released figures show that Britain also continues to be the capital of global financial technology investment.

New figures released by Innovate Finance have indicated that Britain remains the global and European leader for fintech investment.

Data revealed that the UK fintech sector continues its role as the top-ranking investment destination in Europe, with $4.1bn venture capital and growth private equity investments across a total of 408 deals.

The country accounted for just under half of the total $9.3 billion invested, and with more investment capital than the combined efforts of France, Switzerland, Germany, the Netherlands and Sweden.

Firms based in London saw a huge jump in investment, attracting 91% of capital invested in UK fintech, receiving $3.8 billion across 310 deals.

Commenting on the UK’s position, Charlotte Crosswell, CEO of Innovate Finance, said: “Given the tough and turbulent year we’ve experienced, it’s very encouraging to see strength and resilience in the global fintech sector’s ability to raise capital.

“Now more than ever, we should celebrate the strong position the UK has carved out at an international level. We are a world-leading fintech hub, and as the figures reveal, the epicentre of fintech in Europe – despite the many challenges thrown our way.

“The pandemic has created new barriers for many companies seeking funding, so it is all the more vital that we support our innovative companies to fuel their future success and growth.

“The upcoming Fintech Strategic Review is a key step on that path that will help to ensure long-term, sustained investment.”

There was also good news for female founders in UK fintech, who saw investment backing grow to $720m in 2020, accounting for 17% of total investment – an increase from 11% of the total in 2019.

Worldwide, fintech investment for 2020 reached $44 billion across 3,052 deals. The released figured showed that total investment increased by 14% from 2019, highlighting another strong year for the sector worldwide, and showing resilience in the face of a challenging economic climate.

The UK still came second to the US, which attracted investment of $22 billion, up 29%, while Indonesia ranked third with $3.3 billion and India fourth with $2.6 billion.

Commenting on the importance of this investment during the pandemic, FinTech Scotland executive chair Stephen Ingledew said that two things must be considered.

“One is that during the pandemic the demand and need for digital financial services, and therefore fintech, has accelerated in all walks of life,” Ingledew says.

“The use of technology has played into the innovative propositions, solutions and products that fintech’s have been developing anyway.

“There is an acceleration we have seen, whether it is at Lloyds Bank, NatWest, RBS, and Virgin Money. All of those organisations have accelerated what they were doing. They were doing it anyway, but it’s really been taken up several notches.”

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He continued: “The second thing that has shown to some extent is the level of resilience of the firms. Some have had to pivot or found a way to respond differently and to grasp the opportunities that are much more immediate due to the pandemic environment that was created.

“The resilience and agility, alongside the accelerated demand, plays into why we see those figures coming through.”

Ingledew also comments on boost in Scotland’s fintech sector investment in 2020, which he claimed was a was a “big year”.

“The amount of money going into fintech in 2020 was slightly above 2019, which is a big result in itself because 2019 was quite an important year,” Ingledew comments.

“You have had some new start businesses, or growing businesses, that have been able to raise capital and grow. There are still some challenges out there, but in Scotland, we know that the number is slightly above what it was in 2020, and therefore reinforces those numbers overall for the UK.”

David Paul

Staff Writer, DIGIT

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