Despite a brutal slowdown, the UK market for fintech investment has retained second place globally behind the US, according to the annual marekt barometer from Innovate Finance.
In a year defined by economic headwinds and political change, global fintech investment fell 20% to $43.5 billion across 6,464 deals. Despite a significant global slowdown, the UK remains a leading fintech hub, attracting $3.6 billion in investment - ranking second worldwide and first in Europe for fintech funding. Nonetheless, this headline figure masks a 37% decline from 2023.
All told, the UK secured more capital than the next five European countries combined. In Europe, the UK dominated with $3.6 billion across 576 deals. France raised $1.1 billion from 127 deals - returning into the global top 10 - followed by Germany with $0.9 billion from 149 deals. Smaller markets like Switzerland ($0.5 billion) and Netherlands ($0.4 billion) also contributed.
While the US retained its pole position as the top market - raising $22 billion - the UK ($3.6bn), India ($2.2bn) and Singapore ($1.4bn) maintained the next three positions globally.
Despite the slowdown, the report notes green shoots of recovery in the broader VC investment landscape towards the latter part of the year.
Janine Hirt, CEO of Innovate Finance, cautions: "This is no time for complacency. We know the upswing in investment is coming, and we need to ensure that when it does, the UK is at the front of the queue as a destination for VC funding. To remain a global leader, we need to double down on innovation, market reforms and progressive regulation, ensuring we are prepared to capitalise on the next phase of growth and stay ahead in an ever more competitive world."