Fintech startup funding fell by 13pc last year
Fintech startup funding fell by 13 per cent in 2022, with $11.2bn (£9bn) invested last year.
The number of funding rounds which raised $100m or more reduced by 34 per cent, while the number of newly-minted unicorns fell to just six companies in 2022, compared with 14 in 2021.
According to a new UK fintech report from SaaS-based market intelligence platform Tracxn, the UK remains one of the leading fintech hubs globally. In terms of startup funding, fintech is the leading segment in the country.
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Last year’s funding drop was largely blamed on a 26 per cent fall in late-stage funding, from $9.8bn in 2021 to $7.2bn in 2022.
However, early-stage investments rose by 34 per cent to $3.4bn this year, compared with $2.6bn last year.
During the first quarter of 2022, Tracxn recorded the highest ever volume of funding in the UK fintech sector. $8.4bn was invested in UK fintechs during the first half of the year, compared with just $2.8bn during the second half of the year.
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“This plunge in investments was mainly due to the ongoing war, which has increased the cost of energy and other dependent products and caused a slowdown in economic activity across the region,” said Tracxn.
“However, the UK’s fintech sector is doing relatively better in terms of funding, when compared with countries such as the US, China, and India.”
Tracxn’s research also found that payments, investment tech, cryptocurrencies, and banking tech were the top-performing business models in terms of funding in 2022. Despite this, the banking tech and payments sectors saw their funding levels drop by 55.7 per cent and 31.4 per cent, respectively, when compared with 2021.
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