Fintech is a booming business all over the word Dozens of companies successfully receive investments from interested parties. It sees the year 2017 has been exceptionally good for the UK in this regard. VC Investments in fintech firms more than doubled in the UK last year. With a total of over $18bn, it is evident the local firms are doing something right. It also seems overseas VCs show a great interest in these opportunities.
Contrary to what people would expect, VC investments in fintech are not slowing down. Innovate FInance put together an intriguing report in this regard. While some regions are less popular than in 2016, others are flourishing. Especially the United Kingdom sees a lot of investment capital these days. Just last year, the nation received $1.8bn in fintech investments. A staggering number, although it’s a very positive development altogether.
A Good Year for the UK’s Fintech Sector
With over 220 fintech deals successfully closing, the UK is on the right track. Overall investment levels are up by a whopping 15% compared to 2016. While $704m invested in UK fintech startups is still good, more than doubling this amount is always better. This is mainly thanks to companies such as TransferWise and OakNorth raising hundreds of millions in quick succession.
It is also interesting to note which fintech “sectors’ attract more attention. In 2017, challenger banks were definitely the most popular. Money transfer and FX service providers are also in high demand. Alternative lending is also in the top three, which is good to see. Wealth management is less successful than one would think, but still represents 11% of all 2017 investments. All things considered, very positive trends for UK fintech firms.
The big question is what 2018 will bring to the UK. With VC investment potentially rising again, expectations are rather high. At the same time, this cycle will probably not repeat itself two years in a row. If a stagnation can be recorded, things are looking pretty solid. Any decline will be scrutinized, for obvious reasons. Fintech is a booming industry and that situation will not change. However, there is only so much VC investment to go around.
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