While recent years have seen certain investment sectors suffering, it’s not all doom and gloom. The UK fintech sector is one sector that is booming, with figures showing that it is growing by 24% year-on-year.
Data from Innovate Finance shows that, while global investment in fintech has remained fairly flat, the amount of money invested in UK fintechs alone is greater than the sums invested in fintechs across the rest of Europe combined. In Q1 2022, equity investments into UK fintech reached a ten-year high, hitting £2.5bn.
The UK is a popular place for fintech companies to launch, thanks to London’s financial infrastructure, the fact that Britons tend to be early adopters of new tech and payment types, and the security and willingness to move with the times that the Financial Conduct Authority offers.
It’s a sector that appeals to many investors as a result – but there are a few key areas where experts have suggested things may need to change.
Addressing new priorities
Are investor priorities changing? Some suggest that investors in fintech are no longer purely interested in seeing aggressive growth plans. Instead, it’s been suggested that there are other priorities: seeing USPs that aren’t just based around size, seeing evidence that a fintech’s margins really are sustainable, and seeing evidence that the plans a fintech has are indeed able to be monetised. Sustainability is also a key priority – as well as understanding how consumers actually use the product or service in question.
Doing more for female fintech entrepreneurs
A new report reveals that funding for female-led UK fintechs is falling. In the first half of 2022, just 4% of all UK fintech investment was in female-led businesses – a huge drop compared with the 15% we saw in the first half of 2021.
Conversely, the amount invested in male-led UK fintechs increased by 40% in H1 2022.
It appears that the UK is performing strongly when it comes to fintech growth. However, many are suggesting that certain elements of the sector need to be addressed so that it can continue to flourish.
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