- Funding Decline: Fintech funding in the UK experienced a significant decline for the second consecutive year, dropping by 63% in 2023. The total funding amounted to $4.2 billion, compared to $11.2 billion in 2022 and a 70% drop from 2021.
- Investment Segments: Banking technology, cryptocurrencies, and alternative lending were identified as the top industry segments for funding in 2023. However, all three segments saw a decrease in funding compared to previous years.
- Funding Rounds: The number of funding rounds for UK fintechs decreased by 42% between 2022 and 2023, from 418 to 241, indicating a decline in both late-stage and early-stage investments.
- Top Funding Cities: London continued to be the primary destination for fintech investments in the UK, securing 81% of the country’s total funding in 2023. London received $3.5 billion in fintech investments, maintaining its position as the second-largest globally funded city in the industry after San Francisco.
- Government Initiatives: The UK government’s efforts to support the fintech sector, including the “FinTech for Gov” initiative and the establishment of a center of excellence, have contributed to London’s consistent ability to attract high levels of investment.
- Global Ranking: Despite the funding decline, the UK remains the second most-funded market for fintech, following the USA.
- Industry Performance: While the banking technology, cryptocurrency, and alternative lending sectors were the top performers, they did not attract the same level of funding as in previous years.
- Cryptocurrency Funding Decline: The cryptocurrency sector experienced the largest year-on-year decrease, with a 54% drop from $1.9 billion in 2022 to $866 million in 2023.
- London’s Status: London’s status as a leading global fintech hub has been reinforced by consistent high levels of investment, making it the second-largest globally funded city in the industry.
- Government Support: The UK government’s initiatives, including encouraging the use of technology in its financial departments and promoting sector-wide collaboration, aim to support and boost the fintech ecosystem.
UK fintech funding fell 63% in 2023, new Tracxn report finds
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