FinTech headlines still orbit big cheques and bigger valuations. Yet a funding round is not the same thing as durable progress. If you are a founder, operator, or investor trying to tell a signal from noise, the question is simple: what proves that a business is compounding value over time, not just winning a moment in the market?
This piece lays out a practical way to measure real growth in FinTech using the metrics that matter, shows where funding optics can mislead, and anchors the discussion in the latest UK and global data.
Why funding rounds can mislead
A round reflects market sentiment and deal supply at a point in time. Financing dries up or floods in with macro conditions, interest rates, and risk appetite. For context, Innovate Finance reports that global FinTech investment fell about 20 percent to 43.5 billion dollars in 2024, with the UK still among the top markets.
Quarterly flow has stabilised in 2025 but at a lower plateau than the 2021 peak. CB Insights estimates that Q2 2025 FinTech funding was 10.5 billion dollars, marking two consecutive quarters above 10 billion dollars for the first time since early 2023, while the median deal size in 2024 rose to 4 million dollars.
Within the UK, totals vary by methodology. KPMG’s Pulse of FinTech, which includes venture capital, private equity, and M&A, puts H1 2025 UK FinTech investment at 7.2 billion dollars, down 5 percent year over year. More narrowly defined VC snapshots will show smaller figures. Understanding what is counted is essential when benchmarking your company against “the market.”
What to measure instead
If you want to know whether a FinTech is building compounding value, look at a handful of durable indicators and how they move together over time.
1. Customer acquisition, activation, and retention
The core test is whether new users become active customers and stay. For UK consumer FinTechs, open banking penetration offers a rare, system-level adoption proxy. Open Banking Limited reported 15.16 million users as of July 2025, with 29.89 million payment transactions in that month alone. If your product rides these rails, your share of this growing base and your usage intensity per user matter more than your last headline valuation.
2. Unit economics that improve with scale
Track contribution margin by cohort, not in aggregate. Your average customer profitability should rise as you improve onboarding, reduce fraud losses, and drive lower-cost funding or interchange where applicable. Rising marketing efficiency should show up as falling blended CAC to payback months across cohorts that are still acquiring at scale, not just in a pause quarter.
3. Risk and compliance quality
For credit or payments, growth that pulls forward charge-offs, fraud, or remediation spend is not growth. You want stable or improving loss rates at a constant underwriting cutoff, and declining fraud losses as a share of processed volume. The UK’s Financial Conduct Authority data on consumer trust is a reminder that reputational risk is a growth variable: in 2024 fieldwork, only 39 percent of adults expressed confidence in financial services and 36 percent believed most firms were honest and transparent. Sustained gains in trust can support adoption and retention curves.
4. Productivity and operating leverage
Even for software-led FinTechs, productivity headwinds in the wider economy affect hiring, wage costs, and B2B spend. ONS figures show UK output per hour drifting around pre-pandemic levels, with modest gains in late 2024 but ongoing weakness in 2025. Operating plans that build in conservative top-down productivity assumptions will prove more resilient than those that rely on a rising macro tide.
Measuring compounding with annualised growth
To compare performance across time and against peers, normalise to a compound annual growth rate rather than quoting point-to-point spikes. CAGR filters out the path and gives you the annualised rate required to move from a beginning value to an ending value. If monthly active customers rose from 200,000 to 1.2 million over four years with two flat periods and one surge, CAGR tells you how strong the average compounding really was. You can compute it quickly using a CAGR calculator.
What to do with the number matters more than the number itself. Use CAGR to:
• Compare your annualised revenue growth with your annualised cost base. If revenue CAGR trails headcount or opex CAGR for several periods, operating leverage is not materialising.
• Benchmark adoption curves across products or markets that launched at different times.
• Translate “GMV” growth to net revenue growth if your take rate is changing, so that you are comparing like with like.
Cohort math beats headline growth
Break growth into cohorts by acquisition month or quarter, then track each cohort’s activation, revenue per customer, gross margin, and churn over time. If later cohorts activate faster and reach higher steady-state revenue at lower CAC, your engine is getting better. If later cohorts activate slower or churn faster, the top-line can still rise while underlying quality falls. For lenders, run the same logic on delinquency curves and lifetime loss at origination.
A checklist for real FinTech growth
• Adoption: Rising verified users and active users, not just sign-ups. External proxies, like open banking active users, should corroborate internal trends when your product depends on those rails. The UK base grew to more than 15 million by mid-2025, with payments the leading use case.
• Engagement: Frequency and value of transactions per active user rising over time, adjusted for seasonality. For payments, look for higher authorisation rates and lower reversal or dispute ratios as systems mature.
• Monetisation quality: Growth in net revenue rather than vanity volumes. If take rates compress, show offsetting volume and cost improvements. For savings and brokerage, show net interest margin or spread stability through rate cycles, and the mix shift to recurring fee income.
• Risk stability: Flat or improving loss rates at unchanged underwriting standards, and declining fraud as a share of processed value.
• Cost to serve: Declining support contacts per active customer and rising automated resolution rates. For B2B FinTech, declining implementation time and higher attach for premium modules.
• Operating leverage: Revenue growth outpacing headcount growth over a rolling period. Misses here are common when companies lean too hard on growth marketing rather than product-led expansion.
• Market context: Ecosystem funding plates shift. The UK remains a heavyweight, but totals move with global conditions. In H1 2025, global FinTech funding reached about 24 billion dollars across roughly 2,600 deals. Read these flows as tailwinds or headwinds, not as validation of any single business.
Evidence that growth is more than hype
Consider a consumer payments FinTech that reports “triple-digit growth.” If open banking payment initiations in the UK climbed from 27.5 million to 29.9 million between months, the market grew roughly 8 to 9 percent in that window. If your own payment volumes outpaced that without a spike in incentives or fraud leakage, that is market share gain, not just market growth. Tie share gains to durable product or distribution advantages, like a better variable recurring payment flow or materially higher API availability.
Or take a UK consumer investing app. If cohorts acquired in 2024 show a 6-month faster payback than 2022 cohorts, churn that is 200 basis points lower by month 12, and a 30 percent higher cross-sell rate into tax-advantaged wrappers, that is real engine improvement. Match those curves against FCA sentiment data to test whether gains reflect better product-market fit and trust, not just advertising spend.
Context that matters in the UK
The UK tech ecosystem remains substantial by European standards, with Dealroom sizing it at around 1.2 trillion dollars in early 2025. Yet company formation and productivity trends have been mixed, which affects demand, valuations, and hiring. Building a plan on conservative macro assumptions, strong unit economics, and steady adoption curves will beat chasing the hottest round.
How to report growth credibly on your next board slide
1. Lead with customers, not cash. Show active customers, activity per active customer, and revenue per active customer by cohort.
2. Put CAGR next to year-on-year growth to communicate compounding rather than momentum bursts.
3. Bridge from gross volume to net revenue to contribution margin, and then to operating profit or free cash flow.
4. Disclose risk. Show delinquency or fraud trends at constant policy.
5. Benchmark to the market. If your growth outpaces open banking adoption or category funding declines, you are gaining share in a tougher climate. Reference trusted external series such as OBL adoption and FCA sentiment when relevant.
The bottom line
Rounds make headlines. Compounding makes companies. In a funding environment that has cooled from the peak but stabilised in 2025, the strongest FinTechs are those that translate user adoption into engagement, convert engagement into profitable revenue, and protect that revenue with robust risk controls and operating leverage. Measure CAGR, track cohorts, and tie your internal trends to external adoption and trust data. That is how you separate durable growth from a fundraising story dressed up as progress.