Funding within the UK’s top-performing fintech sector slowed by greater than a 3rd within the first half of 2020, as buyers held onto their cash in the course of the pandemic.
Nonetheless funding ranges nonetheless gained 22 per cent on the second half of 2019, as UK enterprise capital funding in fintech reached $1.84bn throughout 167 offers within the first six months of this yr.
This was in comparison with $3bn invested into 263 startups within the first half of 2019, representing a 39 per cent drop year-on-year in response to information from Pitchbook.
Over half of that $1.84bn went to only 5 corporations, because the continued rise in mega offers — rounds of over $100m — signalled the continued maturing of the sector.
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UK digital banking giants Revolut and Starling Bank took the highest two spots in fintech funding, elevating $580m and £100m respectively in 2020.
They had been adopted by Checkout.com and Onfido with mega rounds of $150m and $100m, whereas Thought Machine got here in fifth at $83m.
“The proliferation of digitisation started well before Covid-19 but it has since accelerated even further,” defined Onfido chief government and co-founder Husayn Kassai.
“Most infrastructure companies that support the digital transition, such as online communications, payments, identity and so on, have seen three years of transition happening within three months.”
Only a fifth of funding within the first half of 2020 went to UK corporations receiving between $5m and $20m, with 35 fintech startups elevating over $376m collectively.
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Smaller injections of as much as $5m went to 87 corporations — marking solely eight per cent of the half-year complete.
“It’s encouraging to see investors are still backing fintechs, particularly those which are accelerating the digitalisation of society,” stated Innovate Finance chief government Charlotte Crosswell.
“But we need to highlight the significant drop in the amount of capital raised during the first half of the year. This is particularly impacting startups, with a recent survey showing that 75 per cent of smaller fintech firms are concerned about their next funding round.”