FinTech

Innovate Finance’s Q1 investment figures for the UK FinTech sector in 2021 reveal a robust recovery following a tough pandemic year. 

The UK FinTech sector raised a total of $2.9bn in Q1 2021. Following a relatively slow investment year for UK FinTech in 2020, this year has started off with a very positive first quarter. 

In total, 117 deals were struck across the UK FinTech sector, with investment levels 153% (2.5x) higher when compared to Q4 2020 – showing renewed confidence and increasing appetite from investors to back FinTech businesses following a turbulent year. 

The 2021 opening quarter is particularly strong, 331% (4.3x) higher than the same period last year, when the UK economy was in its first month of lockdown amid high uncertainty over the longer term impact of Covid. 

Even more impressively, 2021 investment to date also represents 69% of the total amount invested in the whole of 2020, further reinforcing the notion that investors are fast becoming less risk-averse and returning to, if not surpassing, pre-pandemic levels of investment. 

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The first quarter of the year has also been marked by six mega deals ($100m+), nearly matching the seven reached in total in 2020. Amongst these, the standout deals for the sector include Checkout.com ($450m), Starling Bank ($376m), Blockchain.com ($120m then $300m), Rapyd ($300m) and PPRO Financial ($180m then $90m). 

The start of the year has also seen an increasing number of UK FinTechs announce Initial Public Offerings and unveil plans to list their business on public markets. These listings are set to add to the maturing status of the UK FinTech sector. 

The strong Q1 investment figures come off the back of the Kalifa Review, which set out recommendations for the future growth of the sector, and provided a roadmap to ensure long-term, sustained investment. 

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Charlotte Crosswell, CEO of Innovate Finance, commented: “Following a tough and turbulent year in 2020, it’s brilliant to see the speed and vigour with which investor confidence has returned and the Q1 investment figures for our FinTech sector look very encouraging.  

It’s clear that the appetite to fund high-growth, ambitious businesses is back, and investors are ready to put capital behind UK FinTechs that are now so vital to our economic and business recovery.    

“FinTech is the fastest growing sector of our economy, and these latest figures show that despite barriers along the way, capital will always follow great ideas – and the UK is full of them.  

We should be proud of the sector’s performance, and take the Q1 trends as a very positive signal for the rest of the year.”