The British fintech market is perhaps one of the most fascinating hotspots for global fintech over the past few years, but especially since the pandemic hit. Once Brexit went into effect on January 31, 2020, the UK has been fighting to retain its powerful position in the European fintech market in perhaps unconventional ways. Earlier this year, it was announced that Britain would actually be using Lithuania to help file for licenses and begin using their “sandbox”, which is essentially a way for fintechs to test their products on comparable markets to obtain useful data before expanding their operations to a larger scale. Britain has even made it known that they are looking to become the world’s cryptocurrency epicenter, which will surely ensure their success in the fintech industry if they can make it come into fruition. However, this won’t be an easy feat, as the US, India, Nigeria, and Brazil, just to name a few, are fighting just as hard for that number one spot. There is some positive news in favor of the UK, as a recent report from Yahoo! Finance has stated that the UK fintech sector has raised over €2.4 billion in just its first quarter of 2021.
Innovate Finance, which is the industry body that represents UK fintech, has recorded that 117 total deals were made in the sector, and investment levels were up 153% when compared to last quarter. This is even more impressive when compared to prime pandemic lockdown levels, as investment levels are up 331% from the same quarter last year. These numbers are very hopeful as they represent an increased confidence from investors in the UK fintech sector indicating that the economy could be recovering from the hit of the pandemic quicker than at first anticipated. According to Yahoo! Finance, “The investments this year include Checkout.com [€375.5m], Starling Bank [€313.8m], Blockchain.com [€100.2m initially and then €250.4m], Rapyd [€250.4m], and PPRO Financial [€150.2m initially and then €75.1m].” There have also been rumors of many fintechs looking to float on the stock market sometime later this year. It’s clear to Charlotte Crosswell, CEO of Innovate Finance, that people are ready to start putting faith back into the fintech market and back it up with their own capital. She stated “it’s clear that the appetite to fund high-growth, ambitious businesses is back, and investors are ready to put capital behind UK fintechs that are now so vital to our economic and business recovery.” Hopefully, this will lead to the UK retaining its crown in the European fintech sector and lead to some exciting global innovations from the nation.