UK retains crown as Europe’s capital for FinTech investment
Innovate Finance, an industry body representing UK FinTech, has released investment figures for the global FinTech sector in 2020 that reinforce the UK’s position as a global and European leader.
The UK FinTech sector has retained its role as the top-ranking investment destination in Europe, with USD4.1 billion venture capital and growth private equity invested across a total of 408 deals. This represents a YoY drop of 9 per cent – an expected shift given the global Covid-19 pandemic and the surrounding economic challenges. Globally, the UK ranks second only to the US in total capital raised.
Overall, global FinTech investment for 2020 reached USD44 billion across 3,052 deals. Total investment increased by 14 per cent from 2019, highlighting another strong year for the sector worldwide, and showing resilience in the face of a challenging economic climate. The US attracted investment of USD22 billion, up 29 per cent, while Indonesia ranked third with USD3.3 billion and India fourth with USD2.6 billion.
The UK dominated European FinTech investment, accounting for just under half of the total USD9.3 billion, and with more deals and capital invested than Germany, Sweden, France, Switzerland and the Netherlands combined.
Within Europe, Germany was second with USD1.4 billion of investment across 71 deals, up 50 per cent. Sweden ranked third with USD1.3 billion of capital raised, with France (USD522 million) and Switzerland (USD294 million) closing out the top five.
Among global deals, the top three FinTech investment rounds were secured by Gojek in Indonesia (USD3 billion; payments and ride-hailing platform), and Stripe (USD850m; payments) and Chime (USD700m; challenger bank) in the US.
The largest investments in Europe were secured by payments company Klarna in Sweden (USD650 million), and challenger banks Revolut in the UK (USD580m) and N26 in Germany (USD570 million).
London-based firms attracted 91 per cent of capital invested in UK FinTech, receiving USD3.8 billion across 310 deals. Among these, Revolut led the way with the largest UK deal (USD580 million), followed by Molo (USD343 million), and Monzo (USD166 million).
Investment backing for female founders in UK FinTech grew to USD720 million in 2020, accounting for 17 per cent of total investment - an increase from 11 per cent of the total in 2019.
Charlotte Crosswell, CEO of Innovate Finance, says: “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.”