French misery was compounded today when the country was relegated from a listing of the top 10 global fintech investment countries. Following Les Bleus’s exit from the Euros last night, in a defeat against Spain, France has suffered a further blow, being relegated from Innovate Finance’s chart of global fintech powerhouses.
The top ten is headed up by the US, boasting $7.3bn in fintech investment across 599 deals in the first half of 2024, ahead of second-placed UK, with $2 billion and 183 deals, followed by India with $837 million and 78 deals. China with $589 million invested across 30 deals and Germany with $462 million invested across 37 deals make up the top five. However, France which was in the top 10 in the second half of 2023 has now fallen out of it.
Overall, UK fintech investment levels trump the combined value of the rest of Europe, but overall UK fintech, and global fintech investment is declining, according to the figures. The figures from the UK fintech trade body show that the total capital invested in fintech globally hit $15.9 billion in the first half of 2024, down 19% from the second half of 2023.
In the UK, the fintech sector received $2 billion of investment in the first half of 2024, a 37% decrease from the second half of 2023. Despite the downward trajectory, Innovate Finance said it believes the market may have reached the bottom but will not likely see growth until next year.
“It is critical that the sector and policymakers work together to ensure the UK is well-positioned to maintain its market position when investment growth returns,” Innovate Finance said.
Breaking the UK data down, the capital invested in fintech in the first half of 2024 was spread across 1,566 deals, compared to 1,661 deals in the second half of 2023.
There was a shift towards earlier Stage deals (Seed to Series B) and the average deal size was $10.2 million, reflecting a return to early-stage investments, the data shows.
Female-led fintech in the UK received $136 million in investment across 42 deals in the first half of 2024, which represents seven per cent of the UK total of $2 billion, a decline from the 10% reported in the full year 2023.
Jay Wilson, partner, AlbionVC, the VC firm, said:
“Early stage deal flow in UK fintech is healthy, overall the core fintech verticals are maturing but embedded fintech, Gen AI in financial services, fintech at the intersection of Healthcare and Climate, and Digital Assets are all seeing growth”.
In the first half of this year, the UK reported two mega deals- the $620 million investment going to neobank Monzo and $174 million going to savings account challenger Flagstone.
Wilson said:
“Monzo and Revolut are great examples of successful UK fintech innovation, they touch millions of consumer and improve their financial lives, but the UK fintech narrative needs to move beyond creating the next unicorn to enabling the ecosystem to create the next wave of multi decacorn fintech companies.”
Janine Hirt, CEO of Innovate Finance, said:
“Despite a challenging investment landscape in the first half of 2024, the UK fintech sector maintains its position as a global hub for investment, second in the world behind only the US, and maintaining an undisputed leading position in Europe.
“We believe the decline in investment since the 2022 peak may have bottomed out, however the market has not yet shown that it has turned and this may not start until 2025.
“When it does turn, the UK’s challenge is to make sure we can maintain and grow our market position, which is not guaranteed. We continue to work with industry, regulators and policymakers to maintain the UK’s leadership and ensure the necessary investment is in place for the UK to attract critical growth funding.”
