The UK’s FinTech sector defied a slowdown in global investment in the first half of the year, drawing $3.06 billion of new funding, according to KPMG.

The professional services firm’s analysis of investment activity in the first six months of 2019 found that the UK landed six of the top ten deals in Europe, along with 68 per cent of Europe’s total venture capital (VC) and private equity (PE) investment.

The UK accounted for six of the top 10 deals in Europe including: Greensill Capital ($800 million), World First ($717 million), OakNorth ($440 million), Checkout.com ($230 million), Iwoca ($196 million) and WorldRemit ($175 million).

European FinTech investment across mergers and acquisitions (M&A), VC and PE deals reached $13.2 billion.

The report also noted that for VC and PE investments, the average funding amount per deal increased by 90 per cent from $13.6 million to $25.9 million.

This compares to a cooling off in FinTech funding worldwide, with investment standing at $37.9 billion mid-way through this year, down from $62.8 billion in the first half of 2018. There was a marked decline in Asia, with investment activity declining to $3.6 billion from £18.3 billion in the first half of 2018.

UK M&A activity was down, meaning 2019 has not reached the record levels of investment activity seen in the first half of 2018, when the $12.8 billion WorldPay acquisition helped the UK generate $18 billion of investment activity.

Anton Ruddenklau, UK head of FinTech at KPMG, said 2019 is set to be another record year for the UK sector.

“Whilst the first half of 2018 saw some blockbuster M&A deals in the UK, M&A is set for a boost in the remainder of 2019 when the next acquisition of WorldPay closes – this could even see the UK overtake China in overall FinTech investment activity.

“But, the UK cannot rest on its laurels, there was a reduction in angel and seed VC investment which the sector needs to focus on supporting in order to foster the next generation of FinTechs,” he added.

Global FinTech investment dropped off last year’s pace - from $120 billion in 2018 to only $37.9 billion mid-way through 2019, the report stated.

Ian Pollari, global FinTech co-leader at KPMG International, said: “We’re seeing the growth of sectors like WealthTech and PropTech, in addition to increasing participation from the big tech companies looking to leverage the deep customer information they have to expand their reach into financial services.”

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