UK fintech investment slumped 21% last year

UK fintech investment totalled almost $11 billion last year, down from about $13.4 billion in 2024, according to a KPMG report on Wednesday

Investment in the UK financial technology world plummeted by more than 20% last year to the lowest levels since the start of the Covid-19 pandemic, as backers hesitated on macroeconomic risks and flocked to US opportunities.

UK fintech investment totalled almost $11 billion last year, down from about $13.4 billion in 2024, according to a KPMG report on Wednesday, which cited Pitchbook data on global mergers and acquisitions, private equity and venture capital. A total of 418 deals dedicated to fintechs in the UK closed last year, down from 527 in 2024.

Revolut’s blockbuster fundraising at a valuation of $75 billion last year made up a significant chunk of all fintech investment in the UK last year, with the London-headquartered firm raising around $4 billion in total, according to the report.

UK firms still attracted more funding than those in France, Germany, Belgium, the Nordics, Ireland, China and Brazil combined. But the market trailed behind the US, which accounted for $56.6 billion across almost 2,000 deals. Total global fintech funding hit $116 billion, up from $95.5 billion in 2024, according to the report.

There was a particular surge in mergers and acquisitions across the fintech sector globally last year, with $55.4 billion worth of deals announced, up from $44.6 billion in 2024.

Looking ahead, while macroeconomic and geopolitical risks remain, the combination of stronger exit markets, greater regulatory clarity, and accelerating innovation provides a constructive foundation for sustained investment and long-term value creation, said Karim Haji, global and UK head of financial services at accountancy firm KPMG.

Investors are still most drawn to companies developing artificial intelligence solutions, despite concerns of a bubble forming, according to the KPMG report. There’s also increasing interest in fintechs working on opportunities for stablecoins pegged to the euro rather than to the US dollar.