Venture capital and private equity investment in the UK FinTech sector rose to a record $3.3 billion in 2018, up 18 per cent year-on-year, according to a report from Innovate Finance.

The industry body’s sector analysis revealed that growth private equity investment rose 57 per cent to $1.6 billion, while venture capital dipped to $1.7 billion.

Its figures - based on data compiled and validated using PitchBook - have UK FinTech maintaining its position as a world leader, ranking third globally in terms of venture capital invested behind China and the US. Within Europe, the UK continues to dominate, followed by Germany ($716 million and 48 deals) and Switzerland ($328 million and 40 deals).

Revolut’s $250 million fundraise ranked among the top ten largest global venture capital deals of 2018, while Monzo, eToro, Liberis and BitFury were also among the UK’s top five deals, each raising over $80 million.

Challenger banks took the lion’s share of venture capital investment at 27 per cent of the total, followed by personal finance and wealth management (19 per cent), alternative lending (18 per cent) and digital currencies (10 per cent).

The UK remains a competitive investment destination according to Innovative Finance, with half of all investment flowing in from overseas, largely from North America (25 per cent) and Europe (18 per cent).

London continues to be the preeminent centre for FinTech in the UK, with over 80per cent of startups receiving venture capital headquartered in London, claiming over 90 per cent of capital invested.

Global venture capital investment in FinTech in 2018 reached a record $36.6 billion, a jump of 148 per cent from 2017. China’s Ant Financial dominated 2018 with $14 billion raised – representing 38 per cent of all venture capital in FinTech.

Charlotte Crosswell, chief executive of Innovate Finance, said: “The UK has a unique position across financial services, technological innovation, regulators and government which all play a crucial role in this impressive growth journey.

“However, we should not be complacent as new challenges lie ahead; we must focus on growing our talent and capital pipeline across the UK, to ensure sustainable and inclusive growth in the future.”

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