Fintech UK Report: Funding Sinks in 2022

A new report indicates that Fintech funding declined in 2022 as the sector was impacted by a challenging market.

According to Tracxn, private Fintech firms in the UK raised a total of $11.2 billion in 2022, a drop of 13% from the year prior. In 2021, Fintechs raised $12.9 billion.

The report states that much of the decline was from a huge 26% decline in late-stage funding. In 2022, later-stage rounds raised $7.2 billion compared to $9.8 billion in 2021.

Early-stage investments actually increased by 34% to $3.4 billion from $2.6  billion in 2021.

While investing declined later in the year, first quarter activity delivered the highest funding ever in the UK Fintech sector.

Total Fintech funding dropped by 66.7% from the first six months of 2022 to the second half of the year. In H1, $8.4 billion was raised but the back end of the year saw only $2.8 billion in funding for Fintechs.

New unicorns in 2022 included six firms, while in 2021, 14 new billion-dollar-plus firms joined the herd.

Insurtech Ondo was the only IPO from the Fintech space in 2022 when eight firms went public in 2021.

The average investment for seed-stage Fintechs increased by 26%, while the average ticket size for early-stage funding increased by 76% in 2022, compared with 2021. The number of $100 million+ funding rounds fell by 34% to 23 rounds in 2022 from 35 rounds in 2021.

Wealthtech FNX raised the biggest round in 2022 of $1.4 billion, supported by Motive Partners and the Canada Pension Plan Investment Board.

The report claims that the UK Fintech sector, which is a top global Fintech hub, faired better than other jurisdictions like China, India, and the US.

The top segments of Fintech in 2022 include: Payments, Investment Tech, Cryptocurrencies, and Banking Tech. At the same time, Banking Tech and Payments experienced a drop in funding of 55.7% and 31.4%, respectively, when compared with 2021.

Investment Tech and Cryptocurrencies sectors increased by 206.6% and 107%, respectively, from 2021.

London remains the largest UK market with $43 billion, followed by Edinburgh at $1.5 billion and Blyth at $731 million.

 


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