fbpx
Connect with us

Tech + Startups

The UK is attracting Fintech investment at a record rate

Published

on

UK Fintech is continuing to draw record levels of investment. The sector is cementing its place in the UK economy, and looks set to continue growth. According to industry body Innovate Finance, a total of $2.9 billion was raised during the first half of 2019.

And it’s Fintech start-ups that are attracting the lion’s share of investment. Start-ups have also attracted the fastest investment so far, with the total invested during the first six months of 2019 at 85%, which is equivalent to the entire amount invested in 2018.

Fintech investment up year-on-year

This super-fast start for UK Fintech start-ups beats earlier years by a significant amount. Investment in this sector is up 45% year-on-year, and nearly twice that invested during H2 2018.

Data compiled in this research is particularly significant as it shows that the Fintech sector remains robust. In spite of the challenges to the country’s economy caused by Brexit uncertainty, a plummeting pound and the possibility of a no-deal exit from the EU, Fintech remains strong. And there is no reason to think this will not continue, even as Brexit pressure ramps up.

2019 will be a record-breaker

By the end of last year, the total investment in UK Fintech stood was at $3.3 billion. It’s clear that this year’s investment total will eclipse this and set a new record. And while the volume of deals has continued to fall year-on-year, the value of each deal is increasing.

The investment total so far accounts for 123 deals within the Fintech sector, which shows a decline of 30% year-on-year. Two major deals secured so far this year are Greensill Capital with investment of $880 million and OakNorth Bank with $440 million.

Challenger banks receive high amounts of investment

OakNorth Bank is a UK-based operation aimed at SMEs. It provides property and business loans to this sector. Founded in 2015 by entrepreneurs Joel Perlman and Rishi Khosla, its 2018 pre-tax profit stood at £33.9 million. In 2016, it became the first UK bank to host its core system completely on the cloud, using Amazon Web Services (AWS). It’s this forward-thinking technologically innovative attitude that is attracting huge amounts of investment.

Other challenger banks are also receiving significant investment. Monzo has raised $147 million while Starling Bank received $98 million. Other sub-sectors that are popular with investors include foreign exchange and payments.

Later stage investment increasing faster than early stage

Around 85% of investments in 2019 so far come from later stage private equity growth rounds and late stage venture capital. This shows just how much the sector is maturing, with just 15% going towards early venture capital rounds, angel and seed investment.

For example, Checkout.com has raised $230 million so far this year. This platform was launched in 2012 and is now a major international provider of online payment solutions. Using their own proprietary technology, the company promises to handle every part of the payment while providing clients with total transparency.

WorldRemit is an online money transfer platform, which currently boasts four million customers. Founded in 2010, the company is backed by venture capital institutions Technology Crossover Ventures (TCV) and Accel Partners. And this year, the company has received another influx of investment worth $175 million. GoCardless is also benefiting from a new round of investment at $76 million to support growth.

Investment rising outside of London

Investment flows mostly concentrate on Fintech companies based in London at 90%. However, there is a significant rise in investment in other regions. Most notably, investment is higher in the north, with companies based in Newcastle Upon Tyne, Derbyshire and Greater Manchester raising funds. The split in number of deals shows 78% in London and 22% in the rest of the country.

In a press release issued with the report, the CEO of Innovate Finance, Charlotte Crosswell, says: “Investment into the UK Fintech sector shows no sign of slowing down. The flow and impressive size of individual investments demonstrate an ecosystem that is showing signs of growing maturity.”

The research underscores the UK’s position as a Fintech leader in Europe, which is encouraging for an economy battered by Brexit uncertainty. Adds Keith Morgan, CEO of British Business Bank, in an interview with finextra.com: “Fintech is a hugely important sector for the UK economy, providing invaluable innovation in financial services and products.”

It’s certainly encouraging to see record amounts of investment going into this sector. It bodes well not just for the SMEs receiving the funding, but for the economy as a whole. The UK will continue to lead in Fintech innovation as we move through Brexit and beyond.

About Freddie Achom

Frederick Achom is a British-Nigerian serial entrepreneur and tech investor. He is the co-founder and chairman of the Rosemont Group Capital Partners

Freddie Achom is the Founder and Chairman of Rosemont Group, an international private investment group of companies focused on financial services, luxury goods and services, hospitality, renewable energy and digital technology. Residing in the UK and France, Freddie Achom is a notable entrepreneur and investor.

Become A Crypto Expert

Categories

Recent Stories

Trending


Copyright © 2022 Disrupt ™ Magazine is a Minority Owned Privately Held Company - Disrupt ™ was founder by Puerto Rican serial entrepreneur and philanthropist Tony Delgado who is on a mission to transform Latin America using the power of education and entrepreneurship.

Disrupt ™ Magazine
151 Calle San Francisco
Suite 200
San Juan, Puerto Rico, 00901

Opinions expressed by Disrupt Contributors are their own. Disrupt Magazine invites voices from many diverse walks of life to share their perspectives on our contributor platform. We are big believers in freedom of speech and while we do enforce our community guidelines, we do not actively censor stories on our platform because we want to give our contributors the freedom to express their opinions. Articles are not commissioned by our editorial team, and opinions expressed by our community contributors do not reflect the opinions of Disrupt or its employees.
We are committed to fighting the spread of misinformation online so if you feel an article on our platform goes against our community guidelines or contains false information, we do encourage you to report it. We need your help to fight the spread of misinformation. For more information please visit our Contributor Guidelines available here.


Disrupt ™ is the voice of latino entrepreneurs around the world. We are part of a movement to increase diversity in the technology industry and we are focused on using entrepreneurship to grow new economies in underserved communities both here in Puerto Rico and throughout Latin America. We enable millennials to become what they want to become in life by learning new skills and leveraging the power of the digital economy. We are living proof that all you need to succeed in this new economy is a landing page and a dream. Disrupt tells the stories of the world top entrepreneurs, developers, creators, and digital marketers and help empower them to teach others the skills they used to grow their careers, chase their passions and create financial freedom for themselves, their families, and their lives, all while living out their true purpose. We recognize the fact that most young people are opting to skip college in exchange for entrepreneurship and real-life experience. Disrupt Magazine was designed to give the world a taste of that.