Investment has increased seven-fold, rising from £3.9bn ($5.3bn) to £27.56bn ($37.3bn) – putting London ahead of the rest of Europe, the Middle East and Africa (EMEA) combined. The figures reflect a growing number of deals done in the UK which increased to 601 for the year, up from 470. Within the EMEA region, five of the top 10 fintech deals were done in the UK, including the £10.93bn ($14.8bn) acquisition of market data provider Refinitiv by the London Stock Exchange. This deal also ranked the largest globally.
Karim Haji, EMA and UK head of financial services at KPMG, said: “The UK remains at the centre of European fintech investment, with British fintechs attracting more funding than their counterparts in the rest of EMEA combined.
“Fintechs remain strategically important for the UK’s economic growth prospects and it’s vital that the ongoing work to nurture them continues if the UK is to remain a magnet for investment.”
While the UK remains at the forefront, fintech globally has grown enormously with a record number of deals in every region.
Emerging markets have seen increased attention, with KPMG pointing to a “large upswell” in Africa as well as the appearance of lesser known fintech ecosystems, such as in Gibraltar which attracted $400m (£295.51m) of investment.
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The soaring popularity of ‘buy now, pay later’ has been a key factor with companies such as Klarna attracting significant investment.
Recently, it was revealed the UK Government is hoping to persuade the Swedish payments giant to list on the London Stock Exchange with a meeting hosted at Downing Street last week.
KPMG also see cryptocurrencies and NFTs as a growing space for fintech.
Areas with clear regulation, such as Portugal and Germany, have already seen investment grow, shown with Coinbase establishing its European headquarters in Germany.
Globally, investment in blockchain and crypto related companies soared from £3.99 ($5.4bn) in 2020 to over £22.16bn ($30bn).
KPMG said there had been an “incredible increase in the level of recognition for the potential role of crypto” but warned it has also sparked increasing scrutiny from regulators with China completely banning crypto mining.
In recent years, the UK has increasingly positioned itself as a global leader in technology.
Britain now has more tech unicorns (start up companies valued at over $1bn) than France and Germany combined, with £26bn raised by UK start ups in 2021 alone.
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Payments firm Checkout.com recently became the UK’s most valuable tech start-up, following a £29.55bn ($40bn) valuation.
The company does not currently have a stock market listing though it has hinted that it plans to go public in the next few years.
Checkout.com was also represented at last week’s Downing Street meeting which discussed making the UK more attractive for companies to list.
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