Almost three-quarters of smaller UK FinTech companies have a cash runway of half-a-year, while 77 per cent are worried about their next funding round, according to new research from Innovate Finance.

The survey of 126 FinTech startups - of whom 61 per cent had fewer than 25 employees - found that the vast majority of respondents haven't received funding since the start of the Coronavirus lockdown. Of those that have, the majority came from angel investment.

Around 60 per cent confirmed they were adapting their strategy to survive the pandemic and its resulting economic shockwaves, with 32 per cent of those saying they would diversify their revenue and 30 per cent saying they would ‘pivot’ the business to stay afloat.

Around 11 per cent of those adapting their strategies said they may ‘mothball’ their business altogether for the for the foreseeable future, or close outright.

Three quarters of the firms surveyed told Innovate Finance that they had applied for government support either through Bounce Back loans or furloughing. However, chief executive Charlotte Crosswell said that many FinTech companies have been unable to take advantage of current support schemes due to their growth profile.

“It’s evident that the FinTech sector faces a significant funding gap as a direct result of COVID-19 - we need to act fast before it’s too late," she commented, adding: "If we fail to address this, we risk losing many companies in the fastest-growing sector in the UK economy. We cannot turn our backs on the start-ups now or we will pay the price later down the line."

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