UK Fintech Investment Surges Amid Global Downturn

The UK fintech sector saw a near tripling of investment to $7.3 billion in the first half of 2024, according to KPMG. This surge comes despite a global decline in fintech investment, which fell 17 percent to $51.9 billion compared to $62.3 billion in the second half of 2023.

UK fintech investments outpaced the rest of the EMEA region, which experienced a 40 percent drop due to geopolitical uncertainties and high interest rates. Significant deals included a $4 billion buyout of IRIS Software Group by Leonard Green, a $999 million venture capital round by Abound, and a $621 million raise by Monzo. Excluding these major deals, UK fintech investment was $1.8 billion.

In the first half of 2024, there were 198 M&A, PE, and VC fintech deals in the UK, down from 284 in the same period last year. In contrast, the Americas saw a decrease in fintech investment from $38.5 billion to $36.7 billion, with the US dropping from $35 billion to $27.4 billion.

Hannah Dobson, KPMG UK’s head of fintech, noted potential recovery signs with a new UK government and possible interest rate drops. She also highlighted expected investment growth in AI applications within fintech and regtech, alongside the upcoming EU MiCA regulation for crypto and digital assets, anticipated in December 2024.