Despite a levelling off of the pandemic’s halcyon days of intense investment in startups – during 2021, Britain’s fintech industry attracted a record £9.5bn in investment which was nearly half of all investments in Europe – the UK fintech landscape continues to thrive.
The end of 2022 saw London get the largest slice of the VC pie, surpassing both San Francisco and New York, and according to recent research conducted by PwC, the UK ranks third globally in venture capital invested in fintech—China and the U.S. are its main contenders.
As such, the tech ecosystem is estimated to be worth in the region of £257bn and the UK has produced some of the world’s largest and most successful fintechs to date including Monzo, Starling Bank and Zilch UK.
Part of this success is down to adoption rates among consumers – the UK has one of the highest globally at 42 per cent compared to the average which is 33 per cent. It’s estimated that in 2022 over 93 per cent of banking customers turned to online banking.
Additionally Revolut, which is headquartered in London, has reached 25 million customers and is the UK’s largest fintech, despite ongoing difficulties surrounding its application for a UK banking licence.
Bolstering the fintech field
The government has also played its part in bolstering the fintech field and in 2021 commissioned Ron Kalifa to review the sector and suggest strategies to ensure the UK maintains its position as an opportune location to create and grow a fintech business.
These include creating a regulatory framework for emerging technologies, retraining and upskilling workers to close the skills gap and provide a pipeline of fintech talent to fuel further growth in the sector.
Tax credits have been expanded, and enterprise schemes initiated to assist startups and scaleups in established clusters including Manchester and Leeds, Edinburgh and Glasgow, and Birmingham, as well as in emerging clusters such as Newcastle and Durham.
Below are five fintech startups that are making waves within the sector and are earmarked as ones to watch in 2023 and beyond.
Gen Z’s commitment to sustainability and climate action means that 72 per cent of this cohort have already changed their consumer behaviour to reduce their impact on the environment. Treecard is tapping into this market via its wooden top-up debit card which allows users to donate the interest earned on deposits to a climate cause. It also plants trees on their behalf for every 10,000 steps walked (and tracked through the app) and via payments.
SuperFi allows users to manage their credit cars, overdrafts and any outstanding BNPL payments in one place so they can consolidate their debt, calculate the fastest way to repay and get out of debt faster. Co-founded by Tom Barltrop and Nick Spiller, the current cost-of-living crisis has coincided with their ambitions to tackle far-reaching debt problems and the app also offers comprehensive debt support via a range of features and services.
Based in emerging tech cluster Newcastle, Kani is also bringing debt consolidation to the fore but for the B2B market. Used by challenger banks and fintechs, its software reconciles weeks of transaction reporting in seconds and also offers insights gleaned from the data inputted and clients include Sodexo, Osper, Paygo and Onepay.
Carbonplace enables secure and efficient transactions for the carbon market via blockchain technology and aims to fundamentally change how carbon credits are traded so the carbon market can scale and deliver the large-scale investment needed for impactful climate action. Backed by banks with a global client base, it enables customers to learn about the credit they are buying and compare it to other credits to bring price transparency to the market.
- Fidel API
Fidel API captures purchase information in real time and aims to unlock the full potential of payment cards via its suite of financial infrastructure APIs and solutions include digital receipts, loyalty and rewards schemes and personal financial management. Launched in 2018 and headquartered in London, the company is backed by investors including Bain Capital Ventures, NYCA Partners, QED Investors, Citi Ventures, RBC Ventures and Commerce Ventures.
Article written by Aoibhinn Mc Bride at Jobbio.