Despite facing a challenging economic environment, the UK fintech investment market has managed to secure its position as the second largest globally, following the US, according to Innovate Finance’s annual market barometer.
In a year marked by economic headwinds and political changes, global fintech investment declined by 20% to $43.5 billion, spread across 6,464 deals. Despite this widespread downturn, the UK has emerged as a prominent fintech hub, attracting $3.6 billion in funding, which places it first in Europe and second worldwide. However, it is important to note that this figure represents a 37% decrease compared to 2023.
Overall, the UK outpaced the combined investments of the next five European nations. Within Europe, the UK led with $3.6 billion from 576 deals. France followed with $1.1 billion from 127 deals, re-entering the global top ten, while Germany raised $0.9 billion across 149 deals. Other smaller markets, such as Switzerland ($0.5 billion) and the Netherlands ($0.4 billion), also made significant contributions.
The US continues to hold the top spot, raising $22 billion, while the UK ($3.6 billion), India ($2.2 billion), and Singapore ($1.4 billion) occupy the next three positions globally.
Despite the slowdown, the report identifies signs of recovery in the broader VC investment landscape towards the end of the year. Janine Hirt, CEO of Innovate Finance, emphasizes the need for vigilance: “This is no time for complacency. We know the upswing in investment is coming, and we need to ensure that when it does, the UK is at the front of the queue as a destination for VC funding. To remain a global leader, we need to double down on innovation, market reforms, and progressive regulation to prepare for the next phase of growth and stay ahead in an increasingly competitive landscape.”