Fintech
Global FinTech Investment Declined Compared to H2 2023
- In the first half of 2024, total capital invested in FinTech globally reached $15.9 billion, down 19% from the second half of 2023.
- The UK FinTech sector received $2 billion in investment in H1 2024, down 37% from H2 2023, in line with other global FinTech hubs.
- The latest data from Innovate Finance reveals that the UK remains the world’s second largest FinTech investment destination, behind only the US, and continues to be the leading destination in Europe, securing more capital than all other European countries combined.
- Over the past 12 months, investment in the UK has also been above pre-Covid investment levels in 2018 and 2019.
- Innovate Finance believes the market may have bottomed out, but is unlikely to see growth until 2025 at the earliest. It is vital that industry and policy makers work together to ensure the UK is well positioned to maintain its market position when investment growth returns.
New data from Innovate Finance, the industry body representing the UK FinTech community, has revealed global FinTech investment trends for the first half of 2024.
Over the past 10 years, the FinTech sector has been a major success story for the UK, creating over 75,000 jobs, closing the gap in SME lending, driving financial inclusion and growth across the country, and cementing its position as the second largest in the global market.
Total FinTech capital invested globally reached $15.9 billion in H1 2024, down 19% from H2 2023, when total investment was $19.5 billion. FinTech capital invested in H1 2024 was spread across 1,566 deals compared to 1,661 deals in H2 2023. There was a shift toward early-stage deals (from 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, contributing $7.3 billion in FinTech capital across 599 deals, with the UK firmly in second place with $2 billion and 183 deals, rounded out 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 $2 billion in investment, 37% less than the previous 6 months. However, it was still more investment than all other European countries combined, accounting for a 12.7% share of the global market. Over the past 12 months, investment in the UK has also been higher than pre-Covid investment levels in 2018 and 2019.
In the UK, women-led FinTech companies received $136 million of investment across 42 deals in H1 2024, accounting for around 7% of the UK total of $2 billion, down from 10% in the full year 2023.
Among the top 10 global markets, the top three countries continue to be the United States, the United Kingdom and India, while France no longer makes it into the top 10.
FinTech investment in the UK and globally has hit a cyclical low since its 2022 peak, in line with the overall global VC market. The data is inconclusive as to whether the market has bottomed out. There are some leading indicators that investors are returning to the markets, for example the London Stock Exchange has seen a welcome increase in share issuance in H1 2024 compared to H2 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 investment hub, second only to the US in the world, and maintains an undisputed leadership position in Europe.
“We believe the decline in investment since the 2022 peak may have bottomed out, however the market has not yet shown evidence of a turnaround and this may not begin until 2025. When that changes, the UK’s challenge will be to ensure 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 finance.
“The latest investment data shows increasing global competition for FinTech investment, demonstrating the growing need for UK policy and regulatory action to maintain our leadership in FinTech and wider financial services. Furthermore, with political uncertainty impacting investment elsewhere in the world, the UK has a window of opportunity to move forward.
“We have also today published our FinTech Plan for Government, which sets out priority actions to maintain the UK’s global leadership in FinTech and unlock the FinTech sector’s contribution to the Government’s mission to grow the UK economy and create opportunity for all.”
Source: Innovate Finance
SUBSCRIBE TO THE NEWSLETTER
And get exclusive articles on the stock markets