Fintech
French Poverty Worsens as Fintech Investments Drop from Top 10 Globally
France’s misery was compounded today when the country was demoted from a list of the top 10 global fintech investment countries. After Les Bleus’ exit from the Euros last night, in a defeat to Spain, France suffered a further blow, being demoted from Ranking of the largest global fintech companies compiled by Innovate Finance.
The top ten is led by the United States, which boasts $7.3 billion in fintech investments across 599 deals in the first half of 2024, ahead of second-place United Kingdom, with $2 billion and 183 deals, followed by India with $837 million and 78 deals. China with $589 million invested across 30 deals and Germany with $462 million invested across 37 deals make up the top five. However, France, which was in the top 10 in the second half of 2023, has now dropped out.
Overall, the UK’s fintech investment levels are outpacing the rest of Europe combined, but overall UK and global fintech investment is falling, according to the data. Data from the UK’s fintech trade body shows that total capital invested in fintech globally reached $15.9bn in the first half of 2024, down 19% from the second half of 2023.
In the UK, fintech received $2 billion in investment in the first half of 2024, a 37% decline from the second half of 2023. Despite the downward trajectory, Innovate Finance said it believes the market may have bottomed out, but is unlikely to see growth until next year.
“It is vital that industry and policy makers work together to ensure the UK is well placed to maintain its market position when investment growth returns,” Innovate Finance said.
Looking at UK data, fintech capital invested in the first half of 2024 was spread across 1,566 deals, compared to 1,661 deals in the second half of 2023.
The data shows that there has been a shift toward early-stage deals (from Seed to Series B) and that the average deal size was $10.2 million, reflecting a return to early-stage investing.
In the UK, female-led fintech received $136 million of investment across 42 deals in the first half of 2024, representing seven percent of the UK total of $2 billion, down from 10 percent in the full year of 2023.
Jay Wilson, partner, AlbionVCthe VC firm, said:
“The early stage deal flow in the UK fintech sector is healthy, overall the main fintech verticals are maturing, but embedded fintech, next-generation AI in financial services, fintech at the intersection of healthcare and climate, and digital assets are all seeing growth.”
In the first half of this year, the UK has reported two mega deals: the $620 million investment earmarked for Monzo neobank and $174 million will go to Flagstone Savings Account Challenger.
Wilson said:
“Monzo and Revolut are great examples of successful fintech innovation in the UK, touching millions of consumers and improving their financial lives, but the UK fintech narrative needs to go beyond creating the next unicorn and enable the ecosystem to create the next wave of multi-decacorn fintech companies.”
Janine Hirt, CEO of Innovate Finance, said:
“Despite a challenging investment landscape in the first half of 2024, the UK fintech sector maintains its position as a global investment hub, second only to the US in the world, and maintains an undisputed leadership position in Europe.
“We believe the decline in investment from the 2022 peak may have bottomed out, however the market has yet to show evidence of a turnaround and this trend may not begin until 2025.
“When the tables turn, the UK’s challenge is to ensure we can maintain and grow our market position, which is not guaranteed. We continue to work with industry, regulators and policy makers to maintain the UK’s leadership and ensure the necessary investment is in place for the UK to attract critical growth finance.”