In the first half of 2021, UK fintechs attracted $24.5bn of investment, the highest volume of deals on record, according to KPMG
Revenue-based financing and the environment are expected to become big fintech themes in the UK over the coming months after the sector reached record levels of investment, research claims.
In the first half of 2021, UK fintechs attracted $24.5bn (£17.7bn) of investment, the highest volume of deals on record and second only to the $42.1bn in the US, according to KPMG’s latest Pulse of Fintech report.
The London Stock Exchange’s (LSE) acquisition of data analytics firm Refinitiv for $14.8 billion boosted investment in UK fintech.
The UK also registered a record volume of deals completed at 283.
Revenue-based financing and tools focused on environmental, sustainable and governance (ESG)-solutions as well as carbon tracking and offsetting are expected to be big themes this year for fintech, according to the report.
KPMG also predicted consolidation among more mature areas of fintech as well as more regulatory scrutiny of crypto assets and a strong focus on digital identity.
Karim Haji, UK head of financial services for KPMG, said UK fintechs attracted significantly more funding than their counterparts in the rest of Europe, the Middle East and Africa combined.
Covid-19 has spurred a race to digital in UK financial services and many of the major banks have dipped into their investment pots for digitalisation – a major reason we are seeing so much corporate investment, he said.
This timing, together with the UK’s reputation as a historic financial services sector and ongoing work to nurture fintechs, from testing through to listing, makes the UK a magnet for investment, he said.
Global fintech investment reached $98bn.
Ian Pollari, KPMG’s global fintech co-lead, said overall investment in fintech surged to a record high in the first half of 2021 as investors, particularly corporates and venture capital investors, made big bets on market leaders in numerous jurisdictions and across almost all subsectors.
