Huge increases in UK fintech investment over the past three years has seen the sector explode, but most of the activity is still concentrated in London
UK fintech- Investment in the UK’s financial technology (fintech) firms has grown by 500% in the past three years, compared with 133% for Europe and 170% for the US, says a new report.
Since 2018, UK fintechs have also outstripped the US and Europe in terms of total investment deals, sealing nine major deals over £1m in the first quarter of 2020 alone. This is compared to six and four in the US and Europe respectively in the same time period.
The figures come from recruitment firm Roger Walters and market analysis experts Vacancy Soft, which published their findings in a report, Fintech: Challenger to competitor, on 28 May.
The UK’s fintech market, however, remains firmly London-centric, despite the report noting tech roles in banking had increased 50% since 2017 in regional cities like Manchester, Birmingham and Leeds.
In 2018, for example, 45 of the UK’s 50 fintech deals worth over £1m involved London firms. Although the UK’s total deals nearly doubled to 96 in 2019, bringing in $48bn worth of investment, only eight of these were into regional businesses. In the first quarter of 2020, London fintechs generated almost as much investment at $114m as they did for the entirety of 2017 at $148m, according to the report.
This makes London the second most attractive destination for fintech-related venture capital, second in the world to only the US.
“If the government are serious about levelling up the country to catch up with London, then serious thought needs to be given into how and why London based businesses remain so much more attractive to VCs. Work is already being done in Birmingham with HS2 and within Manchester, Leeds and Liverpool to grow the Northern Powerhouse,” said Ahsan Iqbal, director of technology at Robert Walters.
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