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Investment in UK fintech drops by a third in 2016

07 February 2017  |  7182 views  |  1 UK flag

VC investment in UK fintech dipped dramatically in 2016, showing a 33.7% downward slide to $783 million, in contrast to the $1.2 billion raised in the pre-Brexit 2015 glory days.

The figures, compiled by Pitch Book for Innovate Finance, saw overall global VC investment for financial technology increase by 10.9 % to $17.4 billion in 2016 with 1,436 deals in total.

China at $7.7 billion outpaced the US at $6.2 billion for the first time, with 3 “mega-rounds” each over $1 billion.

Despite the apparent post-Brexit gloom surrounding the UK market, the nation retained its third place ranking, attracting the highest volume of deals outside the US at 173.

Commenting on the findings, Lawrence Wintermeyer, CEO of Innovate Finance says: “Whilst UK FinTech venture investment is down 33.7% in 2016 at $783 million, largely attributed to the uncertainty of Brexit and geo political/macro economic factors, Q3 funding rebounded, and nine of the top 20 deals completed in the six months following the referendum, with the UK retaining its global ranking in third place."

The top three UK deals were Starling Bank at $101 million, iwoca at $57 million and Nutmeg at $52.2 million.

The UK Government is to host an international fintech conference in April in a bid to attract more investment into London's financial technology hub, a move which has been applauded by Wintermeyer.

“The loss of passporting rights will hit fintech payments firms if special provisions to the single market are not negotiated upon leaving the union," he says. "However, maintaining and further improving access to global fintech talent has superseded passporting across the fintech community’s post-Brexit priorities. Over 30% of Innovate Finance fintech founders and CxOs are non-British with many employing European staff. Attracting further investment to UK fintech remains the number one priority."

Comments: (1)

A Finextra member
A Finextra member | 08 February, 2017, 12:22

http://www.slideshare.net/innovatefinance/the-2016-vc-fintech-investment-landscape-71849828/1

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