Research from Dealroom.co and London & Partners, the promotional agency for the City of London, showed that $5.3bn in VC funds were invested in the city's fintechs, almost 2.5 times more than the previous year.  

The figures, which have been published to coincide with Fintech Week London, come amid a global increase in VC investment for fintechs. Since the start of the year to date, more than €264B has been invested globally – up from €114B for the same period in 2020

London's fundraising made it the most successful among European cities and helped the region raise a total of $49bn, outperforming the USA, China and Asia. Europe also has the most unicorn cities with 65.

Key to the good performance in H1 has been the rise in mega funding rounds. Some of the largest deals involving London companies included a $478m series C funding round for payments firm SaltPay, a $450m deal for payments unicorn company Checkout.com, a $350m series D round for insurtech firm Bought by Many and a £322m series D round involving some major institutional investors for Starling Bank.

There was also an increase in late stage funding with two thirds ($3.4bn) of the $5.3bn raised in 2021 coming from funding rounds over $100m, including $2.3bn across six $250m+ deals.

Based on these figures London ranks second only to San Francisco ($7.2bn) in terms of VC investment, coming slightly ahead of New York ($5.2bn). 

London also has the second highest number of unicorns with 29, again second only to San Francisco with 37.The most recent of these unicorns was insurtech firm Tracatable, which secured $60m in series D funding in June. The Dealroom research also identifies 39 so-called futurecorns, which it expects to gain $1bn+ valuations in the future. 

These include digital bank Zopa, payments company Curve and pensions platform PensionBee.

Eileen Burbidge, partner at London VC firm, Passion Capital and HM Treasury special envoy for fintech said: “A record first half of the year for European fintech also indicates investors are increasingly looking at what is going on across the pond from the traditional tech hubs in Silicon Valley.

"It’s promising to see that London fintech firms are attracting a greater mixture of early and later stage funding rounds – demonstrating the maturity of London’s fintech ecosystem and its position as a fintech leader on the global stage,” added Burbidge.