Financial technology continues to boom, both globally and in the world’s number-two location for FinTech start-ups, the UK. That’s according to two new surveys.
First, CB Insights’ fourth annual roundup of the world’s top 250 FinTech companies finds that the 2021 cohort has raised $73.8 billion in aggregate funding across nearly 1,200 deals since 2016.
The 250 have raised more than $40.3 billion in disclosed equity funding in 2021 alone (to mid-September), across 275 deals.
The 250 were chosen via a variety of factors, including financial data, business model, market momentum, and the analysts’ Mosaic algorithm, which measures start-ups’ growth potential.
They include firms at every stage of development, from early-stage players that are just attracting investors, to well-backed unicorns, which are becoming more commonplace as the market consolidates.
Nearly half of this year’s 250 (118 companies) are valued at, or above, $1 billion as of their latest funding rounds.
Despite the pandemic – or perhaps because of it, as consumers and businesses flock to money-management solutions – there have been 178 venture capital mega-rounds in this space (deals worth $100 million-plus) since 2020, with 138 in year-to-date 2021.
The US is the biggest player in the 250, with 64 percent of the companies selected. The UK is runner-up on 10 percent, followed by India, with just under five percent. In total, start-ups from 26 countries make the list, including Indonesia and Nigeria.
So, what of the UK sector? Local start-up growth network Tech Nation says that UK FinTech investment reached a record quarterly high in Q3: $4.9 billion, more than the $4.57 billion raised in total last year.
In the year to October 2021, UK FinTech VC investment hit $11.4 billion.
There is more good news from this week’s Tech Nation report: the UK is home to more FinTech unicorns (40) than all of Europe combined (37). More than half of the tech companies that became unicorns in Britain this year are in the FinTech sector.
Collectively, UK FinTech start-ups are valued at $340 billion, up 61 percent year on year, led by the likes of Revolut and Wise.
This week, Tech Nation announced the 30 companies that have been accepted into FinTech 4.0, the latest iteration of the organisation’s accelerator programme. Forty percent of the 2021 cohort are based outside London, while just under one-third have female founders.
However, there is an implicit note of caution in the report: around half of the record investments being made into UK FinTech firms this year have come from the US, suggesting that many of the spoils from UK innovation may eventually head across the Atlantic.