UK and global fintech investment hits record high

UK fintech firms attracted a record $37.3bn (£27.6bn) of investment last year, research shows.

KPMG data has revealed that there was an almost sevenfold increase in financial backing for the fintech sector during 2021, up from $5.2bn.

The sector attracted 601 merger and acquisition (M&A), private equity and venture capital deals during 2021, up from 470 in 2020.

UK firms made up five of the top 10 deals last year including the London Stock Exchange’s bumper $14.8bn acquisition of Refinitiv.

Global fintech investment also hit a record high of $115bn, KPMG said.

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The main fintech sectors attracting investment were payments, insurtech, regtech, wealthtech, cybersecurity and the crypto or blockchain market.

KPMG predicted increased focus on environmental, social and governance- focused offerings and suggested there could be more scrutiny of embedded finance and cryptocurrency regulation in 2022.

The consultancy said it expects more “mature fintechs” to consider initial public offerings this year to help their investors with exit strategies.

“A lot of fintech activity in the Europe, Middle East and Africa region to date has focused on the direct-to-consumer space,” Bernd Oppold, a partner at KPMG, said.

“With many of those business models maturing, the next big fintech push, next to crypto, we expect to see will likely be in the B2B space as fintechs look to tackle more systemic issues and help existing businesses improve their financial processes and value to customers.”

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