The first half of 2025 signals a stabilisation in global and UK FinTech investment following several periods of market recalibration. While overall funding volumes remain soft, the market has reached an equilibrium against the backdrop of the volatile global geopolitical environment.

The UK remains first in Europe - reporting broadly flat funding compared to the 2nd half of 2024.

This report provides a detailed look at investment activity across regions, highlighting emerging trends, standout deals and perspectives from Innovate Finance members and the wider venture ecosystem.

The key headlines for the FinTech Investment Landscape in H1 2025:

Global Overview: Fintech Funding Around the World

In the first half of 2025, global FinTech investment reached $24 billion across 2,597 deals, marking a 6% increase compared to the $22.4 billion recorded in the second half of 2024. The rolling annualised trend also shows the last 12 months investment was up 7%.

The UK was broadly flat in the previous 6 months, recording $1.5 billion. The Rest of Europe (RoE) reported a 28% rebound to $2.9bn, led by France and Germany.

Meanwhile, the US was also broadly flat at $11.5bn (down 1%) although on a rolling 12 month basis was up 4%. The Rest of the World (RoW) saw investment increase 16% to $8bn.

Overall, the trend indicates a welcome stabilisation of investment levels.

Commenting on the 1st half of the year performance, Kaan Akin, Chief Investment Officer at Tenity said:

“We’re not in a hype cycle - we’re in a recalibration. Investors are moving away from broad bets and looking for sharper execution, deeper tech, and clear paths to revenue. The next wave of fintech winners will be those solving infrastructure-level problems with AI-native models and defensible go-to-market strategies. This is less about chasing headlines and more about earning scale through substance.”

Top 10 Countries for Fintech Investment in H1 2025

In the first half of 2025, the United States led global FinTech investment activity with a dominant $11.5 billion raised across 1,082 deals, underscoring its continued position as the largest and most active FinTech market worldwide.

The UAE moves into 2nd place for the time being as a result of the period’s largest deal, Binance’s $2bn raise.

The United Kingdom sits in the 3rd place with $1.5 billion, flat on H2 2024 (up 1%), raised over 240 deals, maintaining its status as the leading European FinTech hub.

India and Singapore have made 4th and 5th position in recent years, and did so again in H1 2025. India recorded around $1.4 billion through 109 deals, reflecting the rapid growth and increasing investor interest in its FinTech ecosystem.

Singapore, with $797 million raised in 100 deals, reinforced its role as the leading FinTech hub in Southeast Asia

Competition for the 6th spot globally has been fierce, with Brazil, China and Germany taking turns over the last 3 years. In H1 2025, France has taken 6th place ahead of all of them, with $693 million of capital raised, marginally ahead of Germany with $668 million.

The ability to attract capital has not been uniform across sectors, however.

Commenting on which sectors and stages are attracting capital Rezso Szabo, General Partner & Head of London at Illuminate Financial said:

“In H1, we continued to see a bifurcated venture and early growth market. For a minority of startups, the environment resembled the fundraising highs of 2021 - with all the associated risks and opportunities. However, for others, particularly those outside specific sub-themes within AI or Digital Assets, it has been difficult to attract investor attention. On the startup side, I see new cohorts beginning to mature - teams building highly focused products with lean teams and strong capital efficiency. I expect to see increased investment deployment from venture and early growth investors as these companies grow into their target range. Yet another bifurcation is emerging: capital allocation is increasingly concentrated among top-tier funds and those emerging managers who have delivered meaningful exits and returned significant capital to their LPs.”

Leading the Pack: Top 5 Global Fintech Deals in H1 2025

The largest deal in this half year was the $2bn capital raise by Binance. This is the largest FinTech capital raise since Stripe in H1 2023 ($6.8bn), and is one of the largest capital raises seen in FinTech. The consideration was reportedly paid in stablecoin, as befits a capital raise for a cryptocurrency exchange.

Alongside this deal, once again the Payments sector has executed some of the largest deals in the market, reflecting both the high growth of the sector and capital required to build out a successful Payments business.

FinTech Fundamentals

Before we dive into regional trends, it is worth standing back to consider the underlying fundamentals of the FinTech sector.

The recent report Fintech’s Next Chapter by BCG and QED provides excellent analysis of the state of play. It tells us that globally, the FinTech sector reported impressive double digit revenue growth from 2022 to 2024, while at the same time increasing EBITDA margins four-fold. BCG and QED highlight that the “growth at all costs” mindset is over for FinTechs, saying “sustainable growth will be the yardstick of success against which investors will measure them. When capital markets reopen - if perhaps later than some might hope - there will be a reckoning with this reality.”

It is therefore unsurprising that there has been a hiatus in investment over the last few years as new capital waits for these rapidly growing companies to catch up with investors’ recalibrated investment criteria.

The overall message though is that the recent slowdown in investment is not a reflection of the prospects of the sector. Instead, the FinTech sector is performing well and continuing to grow rapidly, which provides a strong, fundamental base for future Fintech investment.

To illustrate this from a UK perspective, several of our largest members are now both high growth and profitable. The combined 2024 published profits before tax of Allica Bank, Atom Bank, Funding Circle, Iwoca, Monzo, OakNorth Bank, Revolut, Starling Bank, Tandem Bank, Wise and Zopa Bank was an impressive $3.3bn. In terms of contribution, they booked combined tax charges of $848m and together employ over 26,000 staff.

Europe’s Fintech Investment Landscape in H1 2025

European FinTech continued to show resilience in H1 2025, attracting $4.4 billion, up an impressive 17% on the previous half year, across 653 deals, although flat on a rolling 12 month basis.

The United Kingdom once again led the region, raising $1.5 billion from 240 deals. France followed with $694 million across 65 deals, and Germany closely behind with $669 million from 58 deals. These three markets remain the backbone of Europe’s FinTech ecosystem, drawing consistent investment.

Beyond the top tier, countries like Netherlands ($285m), Spain ($215m), Switzerland ($200m) continue to feature.

UK Fintech Market: Investment Trends

In the first half of 2025, FinTech investment in the UK totaled $1.5 billion , representing a 1% increase on the second half of 2024. This indicates a stable market environment, reflecting cautious investor sentiment in the UK market.

Shedding light on the current UK market, Tim Levene, CEO at Augmentum Fintech said: “The first half of 2025 reaffirmed the flight to quality in UK fintech. Amid persistent macroeconomic pressures, investors have prized valuation discipline, while deal flow for the best companies has remained steady.

We enter the second half of the year with cautious optimism, driven by AI innovation finally crossing the chasm from ideation to production. Looking ahead, the continued rerating of many global listed fintechs are reopening the public markets which, along with a pick-up in M&A, will provide much-needed liquidity. Crucially, this will recycle capital back into the early-stage ecosystem where it is needed most."

Throughout this recalibration of global FinTech investment it is notable that the UK has retained its #1 rank in Europe. However, one of the issues constraining market growth globally and in the UK is the funding position of the venture capital funds themselves.

Explaining the situation, James Codling, Managing Partner at Volution said:

“Fundraising remains one of the toughest aspects of the current venture landscape. There’s still a widespread misconception around the availability of dry powder - but in reality, many funds are capital-constrained, focusing heavily on supporting existing portfolio companies and under pressure to demonstrate DPI. That means fewer new investments are being made, and those that are tend to be concentrated in a smaller set of high-conviction deals. The market is in a bit of a holding pattern - waiting for liquidity to improve and confidence to return.”

Mega Deals: Top 5 UK Fintech Deals

Innovate Finance Members: Fundraise in H1 2025

Congratulations go to Innovate Finance members who raised capital in the first half of 2025 including

Commenting on the high quality of investments, Kevin Chong, Co Founder & General Partner at Outward VC said:

“Although the headline fintech investment figures have been declining since the 2021/22 peak, we have never been more satisfied with the quality and breadth of opportunities at the seed stage. So far this year, our investments have encompassed founders at the intersection of fintech and global challenges such as healthcare, fraud, capital markets and generational wealth transfer. Notably, these founders are spread across the UK, with our most recent portfolio companies addressing these global challenges from headquarters in Edinburgh, London and Manchester “

IPO Market

The IPO market is now of increasing interest to FinTechs. It follows similar cyclicality to the venture capital markets and is often a leading indicator of investment market recovery.

Commenting on the current state of the market, Gautam Pillai, CFA, Head of FinTech at Peel Hunt said:

“The global FinTech landscape is regaining momentum, with standout US IPOs - such as Circle, Chime, and eToro - reigniting investor appetite. In parallel, the UK FinTech ecosystem continues to demonstrate resilience and depth, home to over 1,800 high-growth firms, 18 unicorns, and £2.42 bn in equity raised in 2024 alone. The UK remains Europe’s leading FinTech hub, supported by a strong pipeline of IPO-ready companies. With market revenues projected to nearly double to approximately $40 bn by 2030, the sector presents a compelling long-term growth opportunity for investors.”

Interest in secondary market deals has also been increasing, as FinTechs remain private for longer and seek liquidity for staff and early investors.

The FCA has now finalised the rules for PISCES platforms for private market transactions and we hope to see the first deals in the second half of 2025. As noted above, there is also a demand from VC funds to make some realisations.

Explaining the trend in secondary market volumes, Kristaps Ronis, Partner at Ion Pacific said:

“Amid a prolonged IPO drought and sluggish M&A activity, many VC funds are struggling to generate DPI, with the median DPI for 2015 vintage EU funds standing at just 0.48x. In this context, secondaries - most notably continuation vehicles and fund recapitalizations - are playing an increasingly important role in helping managers return capital to LPs. As a result of this trend, global venture capital secondary transaction volume is estimated to reach an all-time high of $122 billion in 2025. We expect secondary market activity to remain strong in the second half of the year, continuing the momentum seen in H1.”

Summary

While the financial performance of the FinTech sector is very strong, investment volumes remain well below peak levels.This reflects the end of the “growth at all costs” philosophy, and the reduced available funding capacity in VC funds. The investment market has now reached a current equilibrium, and the sector is displaying the fundamentals and innovation potential to support an upturn in funding when it re-starts.

The UK continues to play a leading role, maintaining its #1 European market position in both rising and falling markets. Meanwhile the rest of Europe’s momentum is building and Asian markets are seeing rapid growth, leaving no room for complacency.

Innovate Finance sources data for this report primarily from PitchBook, supplemented by Beauhurst and Innovate Finance’s own data analysis.The report focuses on venture capital (VC) equity investment in FinTech, excluding debt capital raises from the analysis as of 1 July 2025.