Record-breaking year for UK FinTech

Five pound notes money

Innovate Finance, the industry body representing UK FinTech, has published details of the record-breaking investment secured across the UK FinTech sector during the first six months of 2021.

The UK FinTech sector raised a total of $5.7bn in H1 2021, outstripping the total investment secured in 2020 ($4.3bn) by 34 per cent and breaking the record year set in 2019 ($4.6bn) by 26 per cent .

The analysis underlines the robustness of the UK FinTech sector following a challenging year brought on by the pandemic and indicates a further consolidation of its position as Europe’s leading FinTech hub.

SaltPay and Checkout.com attracted the two largest deals made this year and are amongst the largest fundraises in the UK FinTech sector so far, with $500 million and $450 million respectively.

Payment technology firms including SaltPay, Checkout.com, Rapyd ($300m), PPRO Financial ($180m), DNA Payments ($140m) and PaySend ($125m) dominated the charts with the most significant investments. Challenger bank Starling Bank ($376m), crypto trading platform Blockchain.com ($300m), pension and payroll providers Smart Pension ($230m) and PayFit ($107m) and credit-scoring specialist ClearScore ($200m) also secured large investments to support their growth.

The first half of the year also saw 13 UK FinTech companies close mega deals (investment above $100m), surpassing the record set in 2019 when 10 firms secured investment that topped $100m. Of these, SaltPay, Checkout.com, Starling Bank, Blockchain.com and Rapyd among the top 10 deals closed across Europe.

Today, the UK is second only to the US (940 deals and $26.7bn) in terms of funds raised, and well ahead of the levels secured by Brazil (40 deals and $3bn), Germany (56 deals and $2.5bn) and India (132 deals and $2.2bn) during the same period.

The strong H1 investment figures come off the back of the Kalifa Review from the first half of the year, which set out recommendations for the future growth of the sector, and provided a roadmap to ensure long-term, sustained investment.

The start of the year has also seen an increasing number of UK FinTechs announce Initial Public Offerings (IPOs) and unveil plans to list their business on public markets. These listings are set to add to the maturing status of the UK FinTech sector.

Janine Hirt, CEO of Innovate Finance,said: “This analysis clearly demonstrates that the appetite among international investors to fund high-growth, innovative firms has never been greater, and is a testament to the UK’s position as a world leader in FinTech. FinTech is one of the fastest-growing sectors of our economy and has a vital role to play in the UK’s economic and business recovery. To have secured record funding – in just six months – speaks to an enduring confidence in UK innovation, as well as our ability to build and scale world-class businesses.”

“It is hugely encouraging to see evidence of this resilience and growth, particularly in light of the uncertainty and challenges brought on by 2020. Both the flow of capital and a wide talent pool are essential to maintaining the sector’s strength, and we remain committed to supporting efforts in these vital areas.”

The data was compiled and summarised by Innovate Finance on 1 July 2021 using PitchBook data. FinTech investment includes accelerator, incubator, angel, seed, early and later stages VC, and PE growth/expansion funding. The data has not been reviewed or approved by PitchBook.

 

Top Deals in UK
Rank Company Deal Size ($m)
1 SaltPay              500
2 Checkout.com              450
3 Starling Bank              376
4 Blockchain.com              300
4 Rapyd              300
5 Smart Pension              230
6 ClearScore              200
7 10x Future Technologies              187
8 PPRO Financial              180
9 DNA Payments              140
10 PaySend              125
11 Blockchain.com              120
12 PayFit              107