Investment into UK fintech by venture capitalists hit a record high in 2017 bucking a global downturn and grew at a faster pace than rivals, new figures reveal, shaking of concerns of a Brexit slowdown.
The year saw $1.8bn (£1.3bn) of cash flow into startups working on innovative financial technology, a rise of more than 150 per cent on 2016 and a bigger increase than either the US or China.
Investors turned their attention back to the US, where $7bn poured into fintech startups last year, up 21 per cent. China had taken the top spot in 2016, but investment plunged by 80 per cent in the past year pushing the country into third and leaving the UK in second behind only the US.
The pull back from China contributed to an overall fall of 18 per cent in fintech investment globally to $14.24bm. However, two "mega" rounds worth $1bn each into China contributed to an "exceptional" 2016, said the report compiled by Innovate Finance and Pitchbook.
It's a reversal of fortunes on the previous year when investment grew in China but plunged in the US and by a third in the UK in the wake of the Brexit vote.
The research found investors are putting larger amounts of cash into fewer deals in the UK. The number of deals declined from the previous year to 224.
Two of the top 20 global deals were for UK firms: Transferwise and Oaknorth. Deals for Funding Circle, Interactive Investor and Monzo rounded out the top five biggest deals in the UK.
More than half of the cash came from outside the UK and 25 per cent of that from North America.
"There is no doubt that London’s position as a leading financial and technology centre is driven by the UK’s focus on policy and talent, allowing us to attract the entrepreneurs and investors that are bringing real, positive change to the world of fintech," said Innovate Finance chief executive Charlotte Crosswell.