Fintech investment across the UK suffered another downturn in the first half of the year despite Chancellor Rachel Reeves’ bold ambitions for the sector.
Total UK fintech investment fell to $7.2bn (£5.36bn) – a drop of five per cent from the same period in 2024.
The decline, revealed in KPMG’s bi-annual Pulse of Fintech report, came amid a period rife for geopolitical uncertainty and market volatility.
Hannah Dobson, head of fintech at KPMG UK, said the industry had shown “continued resilience” despite a “challenging macroeconomic environment”.
The Americas retained its dominance triumphing over rival regions with $27bn invested in the first half. But this did mark a hefty drop from $35.7bn in the second half of 2024.
Europe, the Middle East and Africa was the only area to buck the trend with investment growing to $13.7bn from $11.1bn in the previous half.
On a global scale, fintech investment was hit with the softest half since the beginning of 2020 with just $44.7bn across 2,216 deals.
Reeves’ plea for fintech listings
The fresh UK fintech figures follow investment falling by more than a quarter in 2024.
Chancellor Rachel Reeves has been bullish on the sector, telling industry bigwigs earlier this year she would make the UK the best place to “start up, scale up and to list”.
The Treasury announced a fleet of regulatory reforms as part of the Financial Services Growth and Competitiveness Strategy in a bid to galvanize listings.
The government laid out plans to work in tandem with the Office for Investment and Industry to establish a ‘Listings Taskforce’ to attract “the best and brightest business from around the world” to float in London.
The battle for fintech listings comes as firms vocalise the appeal of a New York float with opportunity for deeper pools of capital.
Money transfer firm Wise dealt a fatal blow to the London Stock Exchange and Reeves’ fintech dream earlier this year after announcing it was ditching its primary listing in the UK in favour of the liquidity offered on Wall Street.
It followed Revolut boss Nik Storonsky branding a London listing “not rational” stating the UK “can’t compete” with the liquidity offered by the US.