UK ‘ranks third for global FinTech VC funding as firms raise $564m in H1 2017’

London FinTech

The UK has ranked third in terms of global FinTech VC investment, with companies attracting $564m during H1 2017.

According to Innovate Finance, the amount raised during the first half of this year represents a 37% increase on H1 2016 but is lower than pre-Brexit H1 2015 figures.

Additionally, the report shows that FinTech venture capital investment in Q1 17 and Q2 17 was higher than Q1 16 and Q2 16 by 45% and 22% respectively.

Some 102 deals were closed in UK FinTech, with Atom Bank, Funding Circle, Monzo and Currency Cloud reaching the top 5 in terms of size.

In fact, the data shows that Atom Bank and Funding Circle were also among the top 20 deals across the globe.

The US and China topped the ranking for global VC FinTech investment attracting $3.3bn and $1bn respectively.

According to the findings, the US experienced a 7.7% increase in terms of deal value when compared to the first half of 2016, but an 18.5% decrease in deal volume during H1 2017 (357) and H1 2016 (438).

China, which ranked first for VC investment in 2016, dropped to second place after failing to top the $7bn raised during H1 2016 – a 86% decrease YoY.

The three biggest FinTech deals came from the US and China, with American firm SoFi raising the largest round globally at $453m. Chinese companies AvidXchange and E-Life Financial came second and third, raising $300m and $275m respectively.

Abdul Haseeb Basit, CFO of Innovate Finance, commented: “The investment data for the first half of 2017 shows that global FinTech investment is down versus the same period in 2016, however, if you adjust for the exceptional mega-deals in China in H1 2016, where three companies, Alipay, Lufax.com and JD Finance, raised over $1bn each, we see that global investment has gone up 28.4%. The sector continues to thrive.”

He added: “Despite the uncertainties of Brexit, the UK retains its position as a leading FinTech hub and has attracted more investment in H1 2017 than the same period last year. These investment figures are lower than H1 2015, signalling a slow return to pre-Brexit funding levels.”

The CFO went on to call on the UK government to continue supporting the sector, “by ensuring the country remains attractive to talent and investment, while also maintaining an open trading relationship with Europe and the rest of the world”.

To put the findings into context, the report comes a day after CB Insight’s research revealed that VC investment into UK Fintech dropped by 40% in Q2 2017.