UK fintech in record VC investment
Innovate Finance, a UK membership association, has revealed VC investment in the nation’s fintech firms was up 153% at $1.8 billion in 2017.
In its “2017 FinTech VC Landscape” report, the organisation says investment more than doubled the amount in 2016 of $704 million and surpassed the previous record-breaking total in 2015 of $1.1 billion.
The UK attracted 224 deals in 2017, the highest volume outside the US (765). The top two deals, TransferWise and OakNorth, both raised rounds of over $200 million and were ranked amongst the top 20 global deals.
Charlotte Crosswell, CEO of Innovate Finance, says the country is “cementing its position as a world leader” and is “driven by the UK’s focus on policy and talent”.
According to Innovate Finance, the maturing of the industry gave rise to larger rounds in 2017, with the top five deals raising over $90 million (TransferWise, OakNorth, Funding Circle, Interactive Investor and Monzo).
Of the total 2017 investment, 24% went into challenger banks, followed by money transfer and FX (21%), alternative lending/financing (17%) and personal finance/wealth management (11%).
54% of investment into the UK was from overseas VCs, largely based in North America (25%) and Europe (14%). This is consistent with previous years and shows that the UK “remains attractive to outside investment, despite Brexit uncertainty”.
Global VC investment reached $14.4 billion across 1,824 deals globally, an 18% decrease year-on-year. However, Innovate Finance says if the two China “mega-rounds” of Alipay and JD Finance – each over $1 billion – are excluded as “exceptional” from 2016 figures, global investment increased 19.4%.
The US was the global leader in terms of capital invested and deal volume, contributing three of the top five global deals (SoFi, Avidxchange and Kabbage).
China, which was top in terms of capital invested in 2016, saw an 81% decrease in 2017 and dropped to third place with $1.6 billion invested in over 39 deals.
The top five global investors by number of investments were: 500 Startups (49 deals), YCombinator (38 deals), Startupbootcamp (31 deals), Techstars (21 deals) and Ribbit Capital (18 deals).
The 2017 FinTech VC Landscape Report is based on data compiled and validated by Innovate Finance using PitchBook.
