Business Technology

4 out of Europe's top 10 fintech deals come out of the UK

3 min read

31 July 2018

The UK has become a world leader in fintech investment outpacing the US and Asia in the first six months of the year.

According to the latest KPMG Pulse of Fintech report the UK saw $16.1billion invested into the fintech sector – particularly artificial intelligence, robotic process automation and regtech – despite possible concerns around Brexit negotiations.

Indeed, four of Europe’s top 10 fintech deals came out of the UK including a $250million raise by mobile banking firm Revolut and $100million by trading network eToro.

Overall global fintech investment reached record levels in the first half of the year to $57.9billion – double the $22billion invested in the second half of 2017. This was boosted by nine “mega-deals” over $1billion including the $14billion raise by Ant Financial and Vantiv’s acquisition of WorldPay for $12.9billion.

Global deal volume was also robust, rising from 834 in the second half of 2017 to 875 deals in the first half.

US fintech companies attracted $14.2B in investment, including over $5B in venture capital investment. Investors were keen to invest in new start-ups in emerging fintech sub-segments, including regtech and investment banking.

Total investment in fintech companies in Europe hit $26B across 198 deals with Asia surging to $16.8B across 162 deals. Blockchain and AI continued to be key priority areas for fintech investors in Asia, in addition to insurtech and regtech.  

“Large deals at all stages powered fintech investment in the first half of 2018,” said Ian Pollari, Global Co-Lead, KPMG Fintech. “But just as notable is the breadth of investment.  We’re seeing a mix of fintech sub-sectors drawing increasing interest, including data, AI and regtech  — these horizontal capabilities have appeal across the full spectrum of the financial services industry.”

Anton Ruddenklau, global co-lead of KPMG Fintech added: “Not only is more investment flowing into emerging technologies like AI and subsectors like regtech, we are also seeing efforts to combine fintech capabilities and embed them within broader digital transformation programs.”

The future also looks bright.

“The real impact of PSD2 and open banking has yet to be fully realised,” KPMG’s head of technology Anna Scally said. “In the months ahead, we expect to see a rise in the number of business opportunities, with companies and big tech players more aggressively exploiting the data at their disposal. We should also see the emergence of new fintechs, leveraging a more level playing field and creating value.”