Innovate Finance: 2016 VC Fintech Investment Landscape
Publication Date: February 2017
China and the US dominate FinTech investment with a combined $13.9 billion of the total $17.4 billion, 80% of the global venture capital raised in 2016, and the top two ranked future foreign investment sources for UK FinTech. Whilst UK FinTech venture investment is down 33.7% in 2016 at $783 million, largely attributed to the uncertainty of Brexit and geo political / macro economic factors, Q3 funding rebounded, and 9 of the top 20 deals completed in the 6 months following the referendum, with the UK retaining its global ranking in third place. The top three UK deals were Starling Bank (challenger bank) at $101.0 million, iwoca (alternative finance) at $57.0 million and Nutmeg (robo advice) at $52.2 million.
The loss of passporting rights will hit FinTech payments firms if special provisions to the single market are not negotiated upon leaving the union. However, maintaining and further improving access to global FinTech talent has superseded passporting across the FinTech community’s post-Brexit priorities. Over 30% of Innovate Finance FinTech founders and CxOs are non- British with many employing European staff. Attracting further investment to UK FinTech remains the number one priority.