FinTech Investment H1 2021
Capital and Investment, News on 15th July 2021
Scales New Heights
Scales New Heights
UK FinTech has closed the first six months of 2021 on a huge high. Capital is flowing into the sector with great momentum, supercharging the growth of FinTech companies. The year has already notched a new record for the UK with $5.7 billion of venture capital invested across 317 deals.
Capital & Investment Lead
UK FinTech Investment (by quarter)
This year’s record funding shows that Europe is fast becoming a key reference in the Fintech world with the UK scene leading the trend. UK Fintechs are indeed thriving, accounting for half of all of H1’s European mega deals.
“At Breega, we’re glad to see that so far fears over the impact of Brexit and Covid on the UK tech scene remain unfounded. Which is why we’re very happy to have chosen to go against the trend and reinforce our presence in the UK. We’re looking forward to further supporting what we like to term UK “Finnovation” and working more closely with the ecosystem in the coming months.”
Ben Marrel, Managing Partner, Breega Capital
This is a third higher than the total investment secured across the whole of 2020 ($4.3bn) and it tops the highest full-year amount set in 2019 of $4.6bn by 26%. Globally, the UK ranks second to only the US which saw $26.7 billion invested across 940 deals. They are followed by Brazil (40 deals and $3bn), Germany (56 deals and $2.5bn) and India (132 deals and $2.2bn).
Investors appear confident that the growth and anticipated returns in the sector will continue to accelerate in the months and years ahead. The latest figures and continued positive sentiment are helping to cement the UK’s position as a leading global FinTech hub.
This certainly looks like record-breaking growth, which is testament to the UK’s vibrant and internationally attractive FinTech ecosystem. The UK is a leading FinTech hub on the world stage, and following the recent Kalifa and Lord Hill reviews outlining a new, strategic focus for the future for UK financial services, there is no reason to believe this trajectory will slow any time soon.”
Chris Locke, UK Financial Services Partner at EY
Alongside the private market, the year has also seen several public listings on both sides of the Atlantic. On the London Stock Exchange, international money transfer company Wise (formerly TransferWise) opted for a direct listing at a valuation of $11bn and the digital pensions platform PensionBee chose an initial public listing at a valuation of $500m.
In the US, UK headquartered payments group Paysafe listed on the New York Stock Exchange following its SPAC merger.
M&A activity also continues to pick up with JP Morgan announcing its acquisition of the digital wealth management platform Nutmeg to support its intention to begin offering banking services to UK retail consumers. Other deals include Royal London, the UK’s largest mutual life, pensions and investment company, acquiring the financial advice fintech Wealth Wizards and Better, the US based digital mortgage lender, acquiring Trussle to further expand its reach within the UK.
Top Deals in the UK
Hover over the bubbles for details.
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 mega deals.
SaltPay and Checkout.com attracted the two largest deals made this year and are amongst the largest fundraisers 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.
Securing investment from a range of global financial heavyweights demonstrates the strength of demand from investors in Starling as it builds a better, fairer and more human bank. It also represents a further vote of confidence in the thriving fintech scene in London, where we have a well-established financial services industry, a deep pool of tech talent and a forward-thinking regulatory environment.”
Anne Boden, founder and CEO of Starling Bank
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. We look forward to watching as the sector continues to reach new heights.
See slide deck below for an overview of UK FinTech Investment during the first 6 months of 2021.