Thursday 30 January 2020 12:01 am

British tech startups retain crown as European fintech capital

The UK has secured its place as the top destination for European fintech investment for another year, reaching a new record of $4.9bn.

Venture capital and private equity investment into the UK’s fintech sector has risen 38 per cent year on year, exclusive data from Innovate Finance today revealed. This was more than three times the amount Germany received in second place at $1.3bn, and six times more than Sweden in third at $778m.

Globally the UK only came second to the US, which netted $16.3bn across 1,095 deals. India came in third place with $3.9bn for fintech startups, while China dropped to fourth place at $1.8bn after suffering a 93 per cent decrease year on year.

As a result of the decline in China, global fintech investment dropped 28 per cent to $35.7bn. Investment in Asia fell 73 per cent, while all other regions reported an increase.

British fintech firms represented seven of the top 10 largest deals in Europe last year, and netted the second largest global deal overall with Greensill’s raise of $800m from Softbank. India’s Paytm took first place with $1.7bn, while US neobank Chime came in third at $500m.

“It’s immensely encouraging to see the year on year growth in investment figures that the key areas of the global fintech industry are attracting, and we should be proud of the unique position the UK has carved out on an international level,” said Charlotte Crosswell, chief executive of Innovate Finance.

“We are a world-leading fintech hub, and as the figures reveal, the epicentre of fintech in Europe – all of which is a testament to the fact that the UK is a leading destination to start and scale a fintech business.”

However the UK reported disproportionately low levels of funding for female founders and chief executives, despite an increased push in recent years for diversity in technology and investment. Only 10 per cent of all investment in the UK went to female-led businesses, a slight increase from 2018.

“The missing piece of the puzzle is ensuring we are also boosting female-led companies, and providing the capital to this area of the market,” added Crosswell.

“There’s no excuse for investors to be overlooking female founders, and as a collective we must do more to better ensure long-term success and growth of the sector.”