World traders poured cash into the UK’s fintech sector final 12 months, nearly doubling the quantity invested right here between 2018 and 2019 — regardless of the remainder of the world struggling a slight downturn in funding.
British fintech corporations attracted $48.5bn (£37.4bn) of funding in 2019, up 91 per cent from $25.4bn a 12 months earlier. Knowledge launched by KPMG at present additionally revealed the variety of offers within the UK reached a six-year excessive, defying the quantity invested globally the place total fintech fundraising fell simply wanting 2018’s report at $135.7bn.
Throughout Europe, the UK accounted for half of the highest 10 offers and netted greater than 80 per cent of the continent’s record-setting whole of $58bn.
Learn extra: British tech startups retain crown as European fintech capital
The biggest funding spherical in UK historical past occurred final 12 months, when fintech lender Greensill raised $800m from Softbank. Different standout offers included funding rounds from the likes of Oaknorth, Monzo and Starling Financial institution, whereas startups Checkout.com and Sumup entered the unicorn ranks as their valuations surpassed $1bn.
KPMG’s Pulse of Fintech report confirmed cross-border transactions world wide remained excessive final 12 months, regardless of ongoing geopolitical tensions. Cross-border deal worth surpassed $50bn in 2019, with 138 offers.
“As numerous UK fintechs hit their high-growth section, they’re inevitably searching for each scale and profitability; they’re popping out of their area of interest and going deep by offering a wider vary of providers or going large by changing into worldwide,” Starling Financial institution boss Anne Boden informed Metropolis A.M.
“The incumbents are in actual hazard of being left behind on each fronts.”
Knowledge from Tech Nation and Dealroom final month confirmed the sector greater than doubled its 2018 whole in enterprise capital funding alone to succeed in $5.4bn final 12 months, comfortably outpacing the remainder of Europe.
In 2020 the funding increase is about to proceed, because the UK’s three most outstanding digital retail banks search further funding.
Revolut is within the technique of elevating $500m in funding at a pre-money valuation of $5bn, based on paperwork seen by Metropolis A.M., whereas Monzo is alleged to be available in the market for one more £100m in capital. Starling closed a $60m funding spherical earlier this month.
Frederic Court docket, founder and managing associate at Felix Capital, stated current offers within the US resembling Morgan Stanley shopping for digital stockbroker E-Commerce for $13bn are an indication that consolidation is on the horizon for British fintech companies.
Learn extra: Morgan Stanley to purchase brokerage agency E-Commerce in $13bn deal
“There can be loads of worth shifting from the established gamers to a number of the rising startups resembling Monzo and Revolut,” stated Court docket.
“Customers have spoken, they usually wish to lead their monetary life the best way they lead the remainder of their life: utilizing their cell phone, and having easy merchandise and apps that they discover as straightforward to make use of as social media. That’s the place the incumbents have rather a lot to enhance.”
Eileen Burbidge, associate at Ardour Capital, added: “The UK is presently the main fintech hub on the planet, due to intensive monetary providers expertise, digital know-how expertise, and progressive regulators and coverage makers supportive of accelerating competitors and accelerating innovation in such a vital sector.”
“As the federal government continues to recognise the significance of fintech and immigration initiatives such because the World Expertise Visa programme unveiled final week, I’m optimistic that the UK will proceed to be the most effective place on the planet for fintech corporations to start out, scale and develop.”
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