Investment into the UK fintech industry plummeted in the first half of 2022 compared to the same period last year, new data has shown.
Fintech investment reached $9.6bn at the halfway mark of the year, almost three times lower than the $27.8bn seen in the first half of 2021, according to a report from KPMG.
2021 would always be a difficult year to follow for UK fintech, as it was a milestone year for the sector. Huge rounds for the likes of Monzo, Starling, and Revolut fuelled the 217% surge in investments from 2020 to 2021.
The early days of 2022 seemed initially positive for fintech, however, unforeseen factors such as the Russian invasion of Ukraine and the sharp rise in inflation have prevented the first half of the year from reaching the expected heights.
The UK’s drop in fintech investment, however, is not unique. Macroeconomic factors have reduced investments across the board, with UK fintech remaining one of the most heavily invested sectors worldwide.
“Despite a slowdown in UK fintech investment compared to last year, the UK remains at the centre of European fintech innovation with British fintechs attracting more funding than those in France, Germany, China, Brazil and Canada combined,” said John Hallsworth, client lead partner for banking and fintech at KPMG UK.
“Similar to the UK, the EMEA fintech market also experienced a slight drop in investment in the first half of 2022 with $26.5bn of investment across the region, down from $31.6bn in the second half of 2021.”