Fintech investment drops globally in first half of year
Global fintech investment slumped in the first half of 2023, which Innovate Finance attributed to “the current economic landscape”.
New data from the fintech trade body found that in the first six months of 2023, there were 1,714 deals globally with a total capital investment of $27.3bn (£21.3bn).
This was a a 14 per cent drop from the second half of 2022, when $31.7bn was invested across 2,500 deals.
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In terms of global ranking, the US remains top with $15.6bn invested across 663 deals.
The UK remained in second place, although it saw a 37 per cent drop in fintech funding compared to the second half of 2022, with $2.9bn invested across 199 deals.
Of those 199 deals, 111 took place in the first quarter of 2023, comprising $2bn of capital invested. A further 88 deals took place in the second quarter, representing $864m.
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However, Innovate Finance noted that UK deal volumes in the first half of 2023 were 35 per cent higher than in the first half of 2020, which it said indicated a positive trend in UK fintech investment.
‘’We are pleased to see that the UK remains a top destination for fintech investment globally, second only to the United States,” said Janine Hirt, chief executive of Innovate Finance. “Our latest report shows that the UK is still receiving more investment in fintech than all of the rest of Europe combined, which is a testament to our amazing community of innovators and entrepreneurs.
“‘’The drop in global and UK fintech investment is an expected result of the current economic landscape, reflecting the cautious investor sentiment as seen across equity markets over the last 12 months.”
Despite global fintech investment falling, the average deal size has increased compared to pre-pandemic levels, at $15.9m. This is on par with 2022’s $16.5m and well above 2020’s average of $12.6m.
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