A new study indicates that 10 years of investment activity in UK fintech firms is slowing and beginning to mature.
The last decade has seen over 1,000 fintech start-ups launch, before going on to raise capital of more than £11 billion. Now, research shows that the scene is reaching maturity, with early-stage investment rounds starting to slow and the number of enterprises being founded in decline as investors change tack. Rather than invest in new start-ups, investment is being made on established companies that are tipped to succeed.
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The comprehensive study assessed each one of the UK fintech firms launched since 2009, with the criteria that they must have received at least one funding round before 2021. Between them, the start-ups have raised a total of £11.4 billion and hold a current total valuation worth £86 billion, employing 57,000 individuals.
Statistics showed that in 2018, funding peaked at £265 million, and that the number of new firms launched in 2019 and 2020 was around half of how many were founded between 2015 and 2018.
However, those UK fintechs that have launched are showing impressive resilience. Out of the firms at least three years of age, 60 per cent are continuing and received funding within those three years, and only 15 per cent have closed.