Total UK fintech investment hit $7.2 billion (£5.3bn) in the first half of 2025, down 5% from the same period in 2024, according to KPMG’s latest Pulse of Fintech report.

Geopolitical uncertainty, market volatility and global concern around macroeconomic growth rates all contributed to more subdued levels of fintech investment, compared to the record highs experienced in 2021, but a few bigger deals bolstered H1’25’s investment total.

That includes a $3.1 billion (£2.3bn) buyout of private markets data group Preqin by Blackrock, the $500 million (£369m) VC round by cross-border payments platform Rapyd Financial Network, and a $500 million raise by wealth and asset management tech platform FNZ.

Overall, although investment fell slightly, 216 UK M&A, PE and VC fintech deals were completed over the first half of the year, up from 198 in H1 2024. 

However, the second quarter of 2025 saw a slowdown in deals compared to the first three months of the year, with UK fintech investment in Q2 sitting at $2 billion (£1.5bn) across 91 deals, compared to Q1’s $5.2 billion (£3.8bn) across 125 deals.

Despite sluggish investment, the UK remains the centre of European fintech investment, with British firms attracting more funding than their counterparts in the rest of EMEA combined. 

Still, the Europe, Middle East and Africa region was the only major region to see fintech investment grow, hitting $13.7 billion (£10.1bn), led by the buyout of cloud platform Esker by investment group Bridgepoint.

“Although UK fintech investment experienced a slight decline in the first half of the year compared to 2024, it is encouraging to observe the continued resilience of the UK fintech sector despite the challenging macroeconomic environment,” said Hannah Dobson, UK head of fintech at KPMG UK.

“Key areas of investment to watch over the coming months are the continuing development of fintech AI and the growth of the digital assets sector.”

Digital assets on track for three-year high

At the sector level, crypto, AI, and regtech are all trending well ahead of 2024’s investment levels at mid-year, with AI being an unsurprising standout, seeing $7.2 billion (£5.3bn) in investment in H1’25 compared to $8.9 billion (£6.5bn) for all of 2024.

Digital assets and currencies, however, attracted the most fintech investment, led by a $2 billion (£1.4bn) raise by Grand Caymans-based crypto exchange Binance. 

KPMG said that the digital asset space is well-positioned to achieve a three-year high, as investors continue to show interest in stablecoins, particularly in activities like trading, remittances, and as a source of payment in emerging markets. 

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That spike in interest is perhaps best illustrated by the incredibly successful IPO of USDC stablecoin issuer Circle with a $1.1 billion (£811m) raise and shares popping 168% on the first day of trading, with other US-based digital asset platforms likely to offer an IPO in the second half of the year.

“We’re seeing a major upswell in activity and investment in the digital asset space. Regulations are starting to come into focus in a number of jurisdictions, giving both startups and investors more confidence,” said Karim Haji, global and UK head of financial services at KPMG.

“Looking ahead to H2’25, digital assets and currencies are well-positioned to see investment grow even more. Whether Circle’s highly successful IPO will drive other crypto firms to exit will also be a trend to watch out for in the space.”