• In the first half of 2024 total capital invested in FinTech globally reached $15.9 billion, a decrease of 19% from H2 2023.
• The UK FinTech sector received $2 billion of investment in H1 2024, a 37% decrease from H2 2023, in line with other international FinTech hubs. 
• The latest data from Innovate Finance reveals the UK remains second globally in FinTech investment, behind only the US, and still the top destination in Europe – securing more capital than the rest of all European countries combined. 
• Over the last 12 months, UK investment was also above pre-Covid investment levels of 2018 and 2019.
• Innovate Finance believes the market may have reached the bottom but will likely not see growth until 2025 at the earliest. It is critical that the sector and policymakers work together to ensure the UK is well-positioned to maintain its market position when investment growth returns.

New data by Innovate Finance, the industry body representing the FinTech community in the UK, has revealed the global FinTech investment trends in the first half of 2024.

FinTech has been a significant success story for the UK over the last 10 years, creating over 75,000 jobs, filling the gaps in SME lending, driving financial inclusion and growth across the country and building a #2 global market position.

The total capital invested into FinTech globally reached $15.9 billion in H1 2024, a decrease of 19% compared to H2 2023 when total investment amounted to $19.5 billion. The capital invested in FinTech in the first half of 2024 was spread across 1,566 deals compared to 1,661 deals in H2 2023. There was a shift towards earlier Stage deals (Seed to Series B) and the average deal size was $10.2 million, reflecting a return to early-stage investments.

Overall, the US received the most investment in H1 2024, bringing in $7.3 billion in FinTech capital across 599 deals, with the UK firmly in second place with $2 billion and 183 deals, rounded off by India with $837 million and 78 deals, China with $589 million invested across 30 deals and Germany with $462 million invested across 37 deals.

In the first half of 2024 the UK received $2bn of investment, 37% down on the previous 6 months. However this was still more investment than all other European countries combined, representing 12.7% share of the global market. Over the last 12 months, UK investment was also above pre-Covid investment levels of 2018 and 2019.

Female-led FinTechs in the UK received $136 million in investment across 42 deals in H1 2024, which represents c.7% of the UK total of $2 billion, a decline from the 10% reported in full year 2023.

Across the top 10 global markets, the top three countries continue to be the United States, United Kingdom and India, whilst France is no longer in the top 10.

UK and global FinTech investment have reached a cyclical low point from their 2022 peak, in parallel with the general global VC market. The data is inconclusive as to whether the market has reached the bottom. There are some leading indicators that suggest investors are returning to markets, for example the London Stock Exchange saw a welcome increase in equity issuance in H1 2024 compared to the second half of 2023.

Janine Hirt, CEO of Innovate Finance, said:

“Despite a challenging investment landscape in the first half of 2024, the UK FinTech sector maintains its position as a global hub for investment, second in the world behind only the US, and maintaining an undisputed leading position in Europe.

“We believe the decline in investment since the 2022 peak may have bottomed out, however the market has not yet shown that it has turned and this may not start until 2025. When it does turn, the UK’s challenge is to make sure we can maintain and grow our market position, which is not guaranteed. We continue to work with industry, regulators and policy makers to maintain the UK’s leadership and ensure the necessary investment is in place for the UK to attract critical growth funding.

“The latest investment figures show increasing global competition for FinTech investment, demonstrating the ever greater need for the UK policy and regulatory environment to take action to maintain our lead in FinTech and in financial services more widely. Moreover, with political uncertainty affecting investment elsewhere in the world, the UK has a window of opportunity to forge ahead.

“We have also published today our FinTech Plan for Government, which sets out priority actions to maintain the UK’s global leadership in FinTech and unleash FinTech’s contribution to the Government’s mission to grow the UK economy and create opportunity for all.”

Source: Innovate Finance