Despite a significant slowdown, the UK fintech investment market has retained its position as the second-largest globally, trailing only the United States, according to the annual market barometer from Innovate Finance.
In a year marked by economic challenges and political changes, global fintech investment dropped by 20%, totaling $43.5 billion across 6,464 deals. Despite this global downturn, the UK remains a leading fintech hub, attracting $3.6 billion in investment. This secures its place as the second-largest market worldwide and the top market in Europe for fintech funding. However, this impressive figure reflects a 37% decline compared to 2023.
UK Leads Europe in Fintech Funding
The UK attracted more capital than the next five European countries combined. Within Europe, the UK led with $3.6 billion from 576 deals. France followed, raising $1.1 billion from 127 deals and re-entering the global top 10. Germany ranked third with $0.9 billion from 149 deals. Smaller markets, including Switzerland ($0.5 billion) and the Netherlands ($0.4 billion), also made contributions.
Globally, the United States maintained its top spot with $22 billion in investment. The UK ($3.6 billion), India ($2.2 billion), and Singapore ($1.4 billion) rounded out the next three positions.
Signs of Recovery
Despite the slowdown, the report highlights signs of recovery in the broader venture capital landscape towards the latter part of the year.
Janine Hirt, CEO of Innovate Finance, cautioned against complacency:
“This is no time for complacency. We know the upswing in investment is coming, and we need to ensure that when it does, the UK is at the front of the queue as a destination for VC funding. To remain a global leader, we need to double down on innovation, market reforms, and progressive regulation, ensuring we are prepared to capitalize on the next phase of growth and stay ahead in an ever more competitive world.”
