Fintech sector receives record investment in third quarter
The fintech sector has received a record amount of venture capital investment in the third quarter, $4.9bn (£3.6bn), to reach more than double so far this year than the whole of 2020.
Research from Tech Nation has showed that the sector has received $11.4bn in venture capital from January to October in 2021, up from $4.57bn in the whole of 2020.
Around half the investment made into UK fintech firms in 2021 ($5bn) so far has come from US investors, showing the international appeal of some of the UK’s fintech firms.
Combined, UK fintech companies are valued at $340bn, a 61 per cent rise from $210bn last year.
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40 of the UK’s 112 tech unicorns are fintechs and the sector accounts for more than half (11) of the 20 UK tech companies that became unicorns in the first half of this year.
After the UK, the next largest unicorn hub in Europe is Germany with eight, the Netherlands (seven) and France (six). London also leads the table of European cities with top fintech unicorn hubs at 35.
This comes as Tech Nation has revealed the 30 companies that have been accepted into Fintech 4.0, the fourth iteration of the company’s sector-specific growth programme for fintech entrepreneurs to enable their start-ups to scale.
The firms accepted into the latest cohort are working to transform all areas of the finance sector; from insurance and investment, to blockchain and digital assets.
This includes MyPocketSkill, which helping younger generations earn, save and learn about money and Ziglu, which creates banking apps for cryptocurrencies.
In total, the new fintech companies have raised more funds than any cohort in previous years, with a collective total raise of £128.1m and over 70 per cent are revenue-generating already.
40 per cent of companies making up the latest cohort are based outside of London.
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“It’s great to see 30 new companies joining Tech Nation’s fintech programme,” said John Glen, economic secretary to the Treasury.
“Our backing for this scheme is one part of our commitment to making the UK a great place for fintech companies to set-up, and scale-up.
“With investment in UK fintech soaring, and 40 per cent of these new companies based outside of London, investors are clearly seeing the enormous potential in this sector across the UK.”
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“We are delighted to welcome these 30 inspiring fintech companies to the Fintech 4.0 cohort,” said Katja Palovaara, fintech programme lead at Tech Nation.
“As the UK’s flourishing fintech sector continues to drive more investment than ever before, our fintech companies are not just disrupting traditional financial sectors; they are working alongside them to ensure that everyone has the tools and knowledge they need to succeed financially.
“Many of these fintechs are not only focussed on helping people earn more and invest better, but on making the world a better and fairer place. We can’t wait to see what they do next.”