A 45%, year-on-year dip in venture capital (VC) funding hit the global fintech sector in the first half of 2017, according to new figures.
However, the VC performance of the UK’s fintech scene was actually up by 37% – indicating that Britain’s slice of the market is outperforming the rest of the world.
The findings have emerged from the latest Fintech Investment Landscape report from international trade association Innovate Finance.
According to the report, last year’s world leader China dropped to second place with $1bn of VC investment, compared with $7bn in the first half of 2016: a whopping 86% decrease.
Its place at the top was taken by the US, which attracted $3.3bn across 357 deals: a 7.7% year-on-year increase in deal value – although that was accompanied by an 18.5% drop in deal volume.
Meanwhile, the UK pulled in $564m across 102 deals to rank an impressive third.
Other key findings that emerged from the report include:
In a statement, Innovate Finance CFO Abdul Haseeb Basit pointed out that the appearance of the main figures was deceptive: “The investment data for the first half of 2017 shows that global fintech investment is down versus the same period in 2016.
“However, if you adjust for the exceptional mega-deals in China in H1 2016, where three companies – Alipay, Lufax.com and JD Finance – raised more than $1bn each, we see that global investment has gone up 28.4%. The sector continues to thrive.”
He added: “Despite the uncertainties of Brexit, the UK retains its position as a leading fintech hub and has attracted more investment in H1 2017 than the same period last year. These investment figures are lower than H1 2015, signalling a slow return to pre-Brexit funding levels.
“The UK government needs to continue its support for the sector, by ensuring the country remains attractive to talent and investment, while also maintaining an open trading relationship with Europe and the rest of the world.”