The UK has smashed its previous record for fintech investment after bringing in $11.6 billion (£8.5bn) in 2021.

This is 217% more than what was brought in during 2020. The previous record was set in 2019, when the sector saw £3.3bn invested during the whole year.

The data was revealed by Innovate Finance, which represents the UK’s fintech industry.

A previous report from the group noted that 2021 was already breaking records during its first half. The UK’s fintech sector had received £4.1bn of investment in the first half of 2021, 34% more than the whole of 2020.

The volume of investment outside London and the Southeast in 2021 reached $696 million, a 237% increase on the $206m seen in 2020.

In addition, the UK’s share of global capital invested increased in 2021, up to 11% from 10% in 2020 and 2019. This represents 45% of the $24.3bn invested in Europe in 2021.

The UK also held its second place position for investment, trailing the US, which brought in $46bn.

With investment made in 713 deals, the UK struck 11% of the 6,495 deals made across the global industry. The Revolut deal, which raised $800m, was among the top ten deals made across the year.

With 234 deal worth over $100m, the UK saw the second most (32) behind the US on 103, but ahead of the rest of Europe on 31.

FinTech Scotland has also revealed a 27% increase in Scottish fintech firms, reaching 190 compared to 147 this time last year.

CEO of Innovate Finance Janine Hirt said: “The huge increase in funding levels is testament to the world-class innovation and ingenuity that’s driving forward and positively transforming financial services.

“Fintech is delivering on all the biggest global trends and needs, including business productivity, consumer behaviours, financial wellness and inclusion, climate change solutions and cybersecurity – which is why it is such a magnet for investors.”

Hirt added: “Our fintech sector is reaching new levels of maturity, and investors are responding to the growing market demand for the products and services our entrepreneurs are able to provide.

“We are on the right trajectory in terms of levels of funding and now it’s time to also properly address the funding gap for underrepresented founders, if we are to create a truly sustainable and forward-looking sector.”

Recommended

• DIGIT Movers and Shakers | December 2021
• Meta facing scrutiny by UK watchdog over VR child safety
• Celebrities more protected from online abuse because of attractiveness

Globally, investment levels have been increasing as well, with the total capital standing at $102bn in 2021, a 183% increase compared to 2020.

India was behind the UK for investment, coming in third with $6.3bn, while Germany received $4.4bn and Brazil $3.8bn.

Furthermore, later stage growth funding attracted the majority of the capital, 61%.

The report warned, however, that the seed investment stage actually saw a decrease in funding compared to 2020. The majority of funds backing UK companies went into early ($2.7bn) or late stage ($7bn) rounds, with a smaller share of funding at the growth stage level ($1.6bn).

Get the latest news from DIGIT direct to your inbox

Our newsletter covers the latest technology and IT news from Scotland and beyond, as well as in-depth features and exclusive interviews with leading figures and rising stars.

We will keep you up to date on the pivotal issues impacting the sector and let you know about key upcoming events to ensure that you don’t miss out on what’s going on across the Scottish tech community.

Click here to subscribe.