Global fintech venture capital soars to $15.2bn as UK market swings back into action post-Brexit vote

 
Jasper Jolly
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China's AliPay system led global venture capital deals with $4.5bn in funding (Source: Getty)

Global fintech venture capital soared in the first three quarters of the year, as the UK market perks up again post-Brexit vote.

Worldwide VC investment in the first three quarters of the year was up by 27 per cent year-on-year, with 839 deals completed in the first nine months of the year, with a combined value of $15.2bn (£12.2bn).

Despite a 26 per cent fall in investment, the UK retained its crown as the third-largest market for tech firms looking to disrupt traditional financial services, according to a report by Innovate Finance. $532m of UK deals were reported up to the third quarter, while prominent post-Brexit funding rounds included SETL and Crowdcube, an equity crowdfunding site.

"Quarter three data indicates a return to VC funding with $139m in deals done following the referendum, although uncertainy remains regarding access to investment and talent," said Lawrence Wintermeyer, chief executive of Innovate Finance. "The government has an opportunity with the upcoming Autumn Statement to further extend support for UK FinTech, maintaining our position as the global FinTech hub."

For UK VC, challenger bank Starling led the pack with $101m in venture capital funding, followed by blockchain start-up SETL and another bank, Tandem, with $39.5m and $31.9m respectively.

Figure showing that China and the US lead the fintech venture capital stakes
China and the US lead the fintech venture capital stakes

Chinese VC investment of $7.1bn, including three deals with over $1bn, outperformed the US for the first time by deal value, although the $1.8bn difference was largely explained by the massive $4.5bn funding for AliPay, formerly part of e-commerce giant Alibaba Group.

US venture capital investment in fintech still dominates by deal volume, with over half of all deals so far. Obamacare health insurance specialist Oscar led the largest US fintech funding round of 2016 so far, at $400m, with Google and Fidelity among its backers.

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