UK fintechs attract record VC investment in the third quarter, outsprinting the total for 2020

Venture Capital (VC) investment in UK fintechs has reached an all-time high, as firms in the industry attracted $11.4bn in the first nine months of the year, and raked in the most quarterly funds in Q3 since records began.

VCs injected a quarterly record of $4.9bn into British fintechs in the three months to the end of September, according to new Tech Nation data.

This took the total amount of funding for 2021 so far to $11.4bn, already double that of the whole of 2020, when it reached $4.57bn. This was bolstered by Cinch’s $1.2bn raise in May and Revolut’s $800m bumper fundraising round in July, which made it the UK’s most valuable fintech.

Almost half ($5bn) of the VC investment in UK fintechs so far this year has come from US investors, highlighting the UK’s market dominance, buoyed by more supportive regulation.

“UK firms have repeatedly demonstrated they are at the cutting edge of innovation in financial technology,” Tech Nation fintech lead Katja Palovaara told City AM.

“The UK is a strong launchpad into international financial markets, and increasingly fintechs are looking to operate on a global basis – particularly in areas such as payments and open banking.”

As a sector, fintech is driving the UK as a leading unicorn hub, and accounted for 11 of the 20 UK tech companies that reached a billion-dollar valuation in H1 2021.