The UK fintech space has not been immune to the broader tech downturn. New data shows that funding for UK fintech startups fell by around 13% last year, with late-stage funding seeing the biggest decline.
According to market insight platform Tracxn, tech startups operating in the financial sector raised a total of $11.2bn (£9bn) in 2022, down from $12.9bn (£9bn). 10.4 billion) of the previous year.
Late-stage funding for UK fintech startups has been hit the hardest in the past year, falling 26%, while early-stage funding actually rose 34% compared to 2021.
The report also found that the number of UK participants in the tech unicorn club, a private company with a valuation of $1 billion or more, more than halved, from 14 companies in 2021 to six.
It was also a quiet year for fintech IPOs, with the sector’s only public launch coming from insurtech startup Ondo, which is listed on the London Stock Exchange through a SPAC deal.
That compares with eight fintech IPOs in 2021, including international remittance company Wise.
Despite the UK’s fintech downturn in 2021, the country’s sector managed to stand out from the pack, retaining its European crown in total investments for the year, according to Innovate Finance.
The UK fintech sector ranked second globally behind the US in terms of total investments for the year.