In total, the sum invested into fintechs across the globe last year reached $51.2 billion (£40b~), marking a decrease of 48% compared to 2022. The capital put into fintechs in 2023 was spread across 3,973 deals, while there were 6,397 deals the year prior.

The UK’s fintechs received the second-highest level of funding globally in 2023, bringing in $5.1b (£4b~). However — and despite UK fintech receiving more than the next 28 European countries combined — the US clinched the top spot with $24b (£18b~). In third place was India at $2.5 billion (£1.9b~), followed by Singapore with $2.2b (£1.7b~) and China at $1.8b (£1.4b~).

The $5.1b (£4b~) that was invested into UK fintech last year was spread across 409 deals, compared to the $14.6b (£11.4b~) and 592 deals in 2022 — a capital decrease of 65%. The decrease, however, is in line with many other top ten markets.

Some countries witnessed notable drops in fintech funding in 2023, including France, Germany, and India. Other countries, however, have jumped — the UEA rose from 24th place to 6th, while Hong Kong jumped from 27th to 9th position.

The value of the top five biggest deals globally last year was over $9b (£7b~), with Stripe receiving $6.9b (£5.4b~), the largest investment of the year. The other four largest deals from highest to lowest are Rapyd, Xpansiv, BharatPe, and Ledger. Of these, Rapyd occurred in the UK.

Speaking on the data and the subsequent findings, Janine Hirt, CEO of Innovate Finance, said: “While economic headwinds presented a significant challenge for fintechs globally in 2023, it is encouraging to see how the UK fintech sector has shown great resilience by maintaining its position as a global hub for investment, second in the world behind only the US, and maintaining the leading position in Europe.

“The data demonstrates a clear opportunity for UK fintechs to strengthen ties with rapidly growing markets in Asia – many of which entered the global top 10 for the first time, and saw more combined investment than the European counterparts. The UK’s mature fintech sector is well placed to develop stronger collaboration with the region, and create new commercial and scaling opportunities.

“We remain confident the momentum of high-profile deals we saw in Q4 will continue well into 2024, as we anticipate a boost to the wider market. We are focused on working with industry, government and regulators, to maintain the UK’s leadership and ensure the necessary support, including proactive regulation, is in place for the UK to attract investment from seed stage to higher levels of critical growth funding.”

Recommended reading

• Opportunities in a Challenging Fintech Investment Landscape?
• Winners Announced at 2023 Scottish Financial Technology Awards
• FinTech Scotland Launches Financial Regulation Innovation Lab

City minister Bim Afolami MP also commented: “UK fintech is a real British success story and it is reassuring to see the UK retain its place attracting more funding than any other country bar the US.

“What’s more, UK fintech firms won twice as much investment as our next competitor and more than the next 28 European countries combined, demonstrating our appeal as a leading global fintech hub.

“This is not happening by accident – we’ve introduced a fast-track visa system to attract global talent to fintech scale ups, a FCA scale box allowing innovators to trial new products and reformed our listings regime to maintain the UK’s position as Europe’s dominant capital markets hotspot.”