Record $5.3bn raised in first six months for London’s fintech sector

London-based fintech companies has attracted over a third of Europe's venture capital funding in 2021 so far

A record $5.3bn of VC capital has been invested into London-based fintech companies.

New research from and London & Partners today reveals that London fintechs have raised more than in any other year, in just six months.

London’s strong performance has also helped drive investment into Europe’s tech sector. European firms have raised $13.9bn, up 51 per cent on 2020’s full year investment levels. In fact, London firms accounted for over a third of overall European fintech funding.

Investment into London’s fintechs is 2.4 times greater than in the same period during 2020, showing confidence in the UK as the economy recovers from Covid-19. The capital ranks second place on the worldwide list for VC investment so far this year, slightly ahead of New York ($5.2bn) and behind San Francisco ($7.2bn).

Covid-19 has accelerated the need for digital products and services and is driving increased investment into fintechs globally, with $54.1bn invested between January and June this. It overtakes the total amount raised in both 2020 and 2019 and it’s just ahead of the $54.0bn in 2018.

>See also: 5 must-dos to help your business emerge from Covid-19 stronger

The findings also show increased for London fintech companies, with almost two-thirds ($3.4bn) of the $5.3bn raised in 2021 coming from funds over $100m, including $2.3bn across six $250m deals. Mega funding rounds for London-based fintech companies increased VC investment levels for UK fintech too, with British fintech firms raising $5.7bn in 2021 so far.

This research has been released to coincide with Fintech Week London starting next Monday (July 12), bringing together leading fintech companies, financial institutions, decision makers and investors to discuss topics including digital identity, open banking and the next big things in fintech.

London is home to over 3,000 fintech companies – more fintechs than any other city globally. As the biggest global fintech cluster, the UK capital is also producing some of the world’s fastest growing fintech companies and is now home to 29 fintech unicorns, second only to San Francisco’s 37.

>See also: Making UK unicorns a more common breed

Further analysis of the research shows London is well placed to take advantage of some of the fastest growing fintech subsectors. Insurtech firms have seen a surge in VC funding over the last few years, with global investment increasing by 373 per cent between 2016 and 2020. Cryptocurrency and Decentralised Finance (DeFi) have also seen a strong start to 2021, with global investment reaching $6.3bn, up from $400m in H1 2020.

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Anna Jordan

Anna is Senior Reporter, covering topics affecting SMEs such as grant funding, managing employees and the day-to-day running of a business.

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