The London Stock Exchange has agreed to back a review addressing declining growth and investments into UK fintech startups.
Announced as part of Fintech Week London, the review will bring together key industry partners, regulators, investors, and fintech companies to better understand the trajectory of the industry and ensure it thrives.
Fintech has been one of the most heavily invested in sectors of UK tech, with 2021 showing record-high funding. However, according to Fintech Week London, new industry analysis has revealed a sharp decline in 2022.
Founding partners that have already signed up to support the fintech funding review include the London Stock Exchange, The Fintech Times, and fintech specialist PR firm SkyParlour, with more expected to follow.
Of the many topical issues affecting the international fintech space, the recent predicted downturn in VC funding is one that affects the entire ecosystem,” said Raf De Kimpe, CEO of Fintech Week London.
De Kimpe said that fintechs at all stages would be affected by a slowdown of investments into the industry and that this would have a “knock-on effect on tech development, talent acquisition and retention, and ultimately the flow of innovative financial solutions to the end-user.”
The Fintech Week London head added that the group is “uniquely placed to launch an independent review into how the fintech industry” given it’s made up of the UK fintech community itself.
“We want to know how the industry can move away from hyper-valuations and unsustainable business models to refocus on financial products and services that improve the world in real-time.”
A recurring feature of last year was huge valuations for fintech firms in Europe, leading to some concern that sustaining that level of expectation and growth would be impossible.
The buy now, pay now later firm Klarna has been demonstrating this idea in 2022, going from a record $46bn valuation last year to seeking a valuation of around $6bn now.