Fintech reaches all-time record investment in Q3
Tech Nation, the UK’s leading growth platform for tech scaleups, today announces the 30 companies who have been accepted into Fintech 4.0 – the fourth iteration of Tech Nation’s sector-specific growth programme for fintech entrepreneurs to enable their startups to scale, both at home and abroad.
Companies accepted into the newest fintech cohort are working to transform all areas of the finance sector; from insurance and investment, to blockchain and digital assets. This includes innovative companies who are helping younger generations earn, save and learn about money (MyPocketSkill), creating banking apps for cryptocurrencies (Ziglu), and making investing more accessible, appealing and values-based (Wombat Invest).
40% of the new cohort companies are based outside of London – including companies from Scotland (DirectID, Zumo and WhisperClaims), Wales (Yoello) and Northern Ireland (loyalBe). On top of this regional diversity, nearly a third (9) of the companies have female founders.
Together, the new fintech companies have raised more funds than any cohort in previous years, with a collective total raise of £128.1mn, and over 70% are revenue-generating already. In UK fintech overall, companies have raised approximately £19bn, and are generating revenues of £7.64bn, as of October 2021.
New record heights for fintech
The high-growth companies join the programme as fintech grows significantly across the UK. The fintech sector has reached entirely new heights, already receiving more than double the amount of VC funding in 2021 so far compared to 2020 as a whole ($11.4bn in January-October 2021 vs $4.57bn in the whole of 2020), and Q3 2021 hit an all-time record for quarterly VC investment in UK fintech ($4.9bn).
Around half the investment made into UK fintech firms in 2021 ($5bn) so far has come from US investors, showing the international appeal of some of the UK’s world leading fintech firms.
With 40 of the UK’s 112 tech unicorns being fintechs – and fintech accounting for more than half (11) of the 20 UK tech companies that became unicorns in H1 of 2021 – the sector is driving the UK as a leading unicorn hub. After the UK, the next largest unicorn hub in Europe is Germany, home to 8 fintech unicorns, second is the Netherlands with 7, and third is France with 6. In terms of leading cities, London is Europe’s top fintech unicorn hub, home to 35 fintech unicorns, while Berlin is home to 6.
In 2021, the top 2 UK fintechs to receive highest funding are Cinch (at $1.2bn) and Revolut (at $800m, Series E funding). Tech Nation’s Future Fifty alumni Revolut became the UK’s most valuable fintech company this year, surpassing Natwest with a valuation of approx £33bn. Combined, UK fintech companies are valued at $340bn, up from $210bn last year, a 61% increase in value between 2020 and 2021, being led by the likes of Revolut and Wise.
Source: Dealroom, ‘fintech funding in the UK’