UK fintech funding topped by only the US despite slide in investment

The UK’s fintech sector was beaten by only the US on total investment last year despite a sharp fall in funding on 2023 levels, according to new figures.

As global fintech investment fell 20 per cent globally to $43.5bn (£35.2bn), the UK attracted $3.6bn (£2.9bn) of total funding, more than than the next five European countries combined, according to data from Innovate Finance.

Despite the sharp fall in new capital coming into the sector, industry figures are hoping for a resurgence in 2025.

“When we’ve been speaking with investors, they’re incredibly positive about 2025,” Janine Hirt, CEO of Innovate Finance, told City AM .

“There was a bit of dry powder there waiting, and now going forward, there’s a lot more clarity as we’re in a post-Budget, post Mansion House environment. There is certainty around the government, both here and in the US.”

Though the UK maintained second place globally behind the US, funding fell much more drastically than the global average, dropping it closer to third place India, which brought in $2.2bn (£1.8bn) throughout the year.

However, the UK performed unusually well in 2023, bringing in more fintech cash than all of Europe combined. Hirt credited the closing of the gap between the UK and global markets to “a natural drop and normalisation”.

Throughout 2024, major UK deals included $621m funding round for Monzo and $267m for Zepz.

Meanwhile, female-led fintechs saw a sharp 78 per cent drop in investment, raising only $120m (£97m), or 3.3 per cent of all UK funding.

“It is a clear indication that we need to be doing more, because that is a hugely disappointing number, and we have to take action to try and increase that,” said Hirt.

Across the rest of Europe, France raised $1.1bn (£891m), returning into the global top 10, followed by Germany with $900m (£729m).