Total cash flowing into the sector tumbled to $9.6bn in the first half of 2022, down almost threefold from $27.8bn in the same period in 2021, according to KPMG’s Pulse of Fintech
UK fintech investment plunged in the first half of 2022 as war in Ukraine and soaring inflation brought last year’s funding frenzy to a sharp close, new figures have revealed today.
Total cash flowing into the sector tumbled to $9.6bn in the first half of 2022, down almost threefold from $27.8bn in the same period in 2021, according to KPMG’s Pulse of Fintech.
The ripples of war and a looming recession have cast a storm across both private and public markets this year, with tech businesses weathering sharp valuation drops as investors grow sceptical of loss-making businesses that promise returns in future.
The slowdown has been felt sharply globally, KPMG found, with investment into British fintech holding up more strongly than much of the continent.
Despite a slowdown in UK fintech investment compared to last year, the UK remains at the centre of European fintech innovation with British fintechs attracting more funding than those in France, Germany, China, Brazil and Canada combined, said John Hallsworth, client lead partner for banking and fintech at KPMG UK.
Similar to the UK, the EMEA fintech market also experienced a slight drop in investment in the first half of 2022 with $26.5bn of investment across the region, down from $31.6bn in the second half of 2021, he said.
The drop in funding was exacerbated by a crop of bumper deals last year which pushed up the total value of fintech investment, including the $14.8bn takeover Refinitiv by the London Stock Exchange Group in January last year.
KPMG analysts said that fintech funding levels remained elevated on pre-pandemic levels however, with funding still well above 2019’s first half figure of $3.8bn.