Venture capital investment into UK FinTech saw a 153 per cent increase year-on-year in 2017, with $1.8 billion invested across 224 deals.

This is according to new figures from Innovate Finance, which revealed that the UK ranked second globally in terms of both capital invested and volume of deals, after the US. The top two UK deals, TransferWise and OakNorth, both raised rounds of over $200 million and were ranked among the top 20 global deals.

Of the total 2017 UK investment, 24 per cent went into challenger banks, followed by money transfer and foreign exchange (21 per cent), alternative lending and finance (17 per cent), and personal finance/wealth management (11 per cent).

Some 54 per cent of investment into the UK came from overseas firms, largely based in North America (25 per cent) and Europe (14 per cent).

Global VC investment dropped 18 per cent year-on-year in 2017, totalling $14.4 billion across 1,824 deals worldwide. However Innovate Finance notes that if the two 2016 deals for Alipay and JD Finance – each over $1 billion – are excluded as ‘exceptional’, global investment increased 19.4 per cent.

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 per cent 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).

Charlotte Crosswell, CEO of Innovate Finance, commented: “Our 2017 FinTech VC Landscape report demonstrates that the UK’s FinTech sector is cementing its position as a world leader. Investment in UK FinTech firms increased 153 per cent, and of these inflows into the UK, 54 per cent came from non-domiciled VCs.

“There is no doubt that London’s position as a leading financial and technology centre is driven by the UK’s focus on policy and talent, allowing us to attract the entrepreneurs and investors that are bringing real, positive change to the world of FinTech.”

Share Story: