The UK is a global leader in fintech. Other than the US and India, there is no other country attracting the numbers of VC investment in the sector.
London is the world’s fintech epicentre, with £7.8 billion thrown at its start-ups last year – more than San Fransico and New York. Two-thirds of the UK’s fintech start-ups are in in the city, and in 2020, the capital attracted 94 per cent of the country’s total fintech venture capital.
Despite investment in the first half of 2023 dropping to £4.6bn from 2022’s £10.8bn as a result of rising interest rates, high inflation, a decrease in valuations and geopolitical tensions globally, UK fintechs are still attracting more VC investment than all other EMEA fintechs combined, with a significant percentage coming from US investors.
There are other reasons for fintechs to be hopeful, too. In March this year, the UK government launched the Centre for Finance, Innovation and Technology – a quango which aims to solidify the UK’s stance as a global centre in the sector.
The UK’s fintechs cover a range of specialisms, from wealth tech and regtech to insurtech and banking. The most common fintech in the UK specialises in wealthtech. It is worth noting many fintechs cross two or more of the below categories.
| Fintech category | % of fintechs |
|---|---|
| Banking | 13% |
| Business banking | 8% |
| Insurtech | 6% |
| Lending | 13% |
| Payments | 19% |
| Quote aggregators | 4% |
| Regtech | 10% |
| Wealth tech | 37% |
Where to find fintech investment
Here is a list of VCs currently investing in fintech and what they’re looking for.
Eight Roads is a global VC backing technology companies, primarily in the healthcare sector.
Accel is a global VC which originated from Palo Alto, California. It invests in early-stage companies in software, SaaS, healthcare, fintech, security and media.
London-based ARIE Capital is a global VC with a primary focus on connectivity, life sciences, fintech, sports and media tech, helping start-ups enter the Chinese market.
Early-stage VC built by exited entrepreneurs ready to back the next generation of tech and impact founders
Augmentum Europe’s leading publicly listed fintech fund, investing in fast growing businesses that are disrupting the financial services sector. Augmentum launched on the main market of the London Stock Exchange in 2018, giving businesses access to patient capital and support, unrestricted by conventional fund timelines and giving public markets investors access to a largely privately held investment sector during its main period of growth.
Beringea is a transatlantic venture capital firm with more than $800m under management across its funds in the UK and the US. Its UK funds primarily invest at Series A through to Series C, and typically lead rounds with cheques between £2m and £10m. Beringea have substantial expertise in SaaS and consumer, and with three decades of experience are able to provide hands-on support to rapidly growing companies.
London-based Dawn Capital focuses on B2B software start-ups, backing the likes of Ably, Copper and iZettle.
Founded in 2018, Digital Horizon invests at every stage into technology companies – particularly in fintech and SaaS.
London-based Element Ventures backs financial technology start-ups across Europe.
Entrée Capital invests predominantly in software, with a current focus in enterprise, SaaS, marketplaces, big data and fintech. The fund will not invest in hardware, medical devices or consumer social networks. Entrée Capital provides multi-stage funding for innovative seed, early and growth companies all over the world.
Since 2014, the VC has been backing female founders across B2B, consumer, healthcare and fintech.
Finch Capital is an early-stage venture capital firm focusing on Europe and South East Asia. They are thematic investors in fintech (financial services, real estate, insurance) and deep tech (AI enabled transformation, security, IoT), across B2C, B2B and B2B2C businesses. They invest in verticals that include marketplaces (e.g. deposits, lending, tax, auto, legal), security (e.g. fraud, network, firewall), online distribution models (e.g. mortgages, insurance) software (e.g. AI-focused SaaS, data management, payments) and IoT (application layer). The fund does state that it will invest €0.25m to €15m over a company’s lifetime.
Force Over Mass has invested in over 175 tech companies at seed and growth stage.
Form uniquely supports its portfolio start-ups to understand and navigate public policy
Businesses must demonstrate the following: a capable management team, strong presence in large markets, rapid growth potential, disruptive products or services and defensible growth margins with recurring revenues. The fund favours the TMT, financial services, energy and business services sectors. FPE Capital is a growth equity investor in the UK lower middle-market. It backs businesses which have proven their business model is profitable and cash generative and is derived from a high proportion of recurring or repeatable revenue
Half of investments are at idea stage and the other half are at seed stage. The founders Frog back at idea stage come and work in their office making use of their team of product people, designers, developers, marketers and recruiters to get their businesses started fast.
Early-stage technology venture capital fund
A boutique venture firm supporting unique, innovative companies. Early stage investor based out of Antwerp, London, and Turkey. As well as providing growth capital, the fund gives businesses access to advice and strategic and operational support. The fund looks for: differentiated products that address a critical need, a strong position against current and potential market competitors, international with a high-growth market opportunity and a highly experienced and driven management. Hummingbird Ventures is a venture capital partner for extraordinary entrepreneurs building fast-growth tech companies. Hummingbird Ventures teamed up with transformative companies, including Deliveroo, Showpad, Kraken, Peak Games, Clear2pay, Amplidata, Gram Games, Shutl and many others. With a presence in London, Ghent and Istanbul, Hummingbird provides swift access to the operational resources and advice needed to build the tech companies of tomorrow. The fund specialises in IT and online services sectors, with particular focus in the following areas: digital media, social media, e-commerce, cloud computing, infrastructure software, enterprise software, gaming and mobile applications
The first software powered VC firm focused on European early-stage start-ups. InReach Ventures is scaling early stage investment across Europe through software. The mission of InReach Ventures is to create and use proprietary software to scale early stage investment across Europe and develop a new model of investing that ensures full alignment between investors and entrepreneurs.
ITV AdVentures Invest backs start-ups in media, apparel, accessory, adtech and information technology sectors.
Based in Jersey, Jigsaw VC invests across fintech, SaaS, healthcare, machine learning and media among other sectors. Notable investments include Canva and YuLife.
Early-stage VC investing in fintech, proptech and consumer tech. Has two funds targeting gap between Seed and Series A.
Offers EIS funding to between 8-12 tech businesses each year with sales of at least £1m each. Also runs £52m Greater London Fund and a separate £100m Scale-Up Fund.
Mosaic Ventures is a Silicon Valley-style venture capital firm based in London, focused on Series A. Its $150m fund invests in founding teams reshaping big markets. Their partners have over 30 years’ experience investing on both sides of the Atlantic. In that time, they have invested across 12 countries in over 70 companies that together have created over $400bn of value. Current focuses are: machine intelligence, future of money, edge computing applications, work OS and open bazaars.
North East Technology Fund invests in technology businesses that are based in, or are willing to relocate to, North East England. Can provide a mixture of equity and mezzanine debt to businesses mostly at the Series A stage. Managed by IP Group and North East Finance.
Multi-stage venture capital fund with offices in London, Stockholm and New York.
VC firm focused on European SaaS and cloud with more than $700m assets under management and more than Series A 100 investments to date. The Notion team founded, built and exited two highly successful SaaS businesses themselves. The Notion portfolio includes Dixa, GoCardless, Mews, Paddle, Unbabel and Yulife. Recent exits include Currencycloud and Brightpearl.
Well-established VC with £2bn under management focused on health, fintech, deep tech and consumer. Previous investments include Cazoo, Secret Escapes and Zoopla.
Outward VC is a fintech-focused VC fund addressing a clear value gap at post-seed to Series A. They look to lead or co-lead the round, with a board seat (observer at a minimum), searching for companies with a market size of at least £1bn, a clear exit opportunity, evidence of product market fit, have the core management team in place, and a sensible or proven customer acquisition strategy
Established in 1999, Oxford Capital is an alternative investment manager that has pioneered the EIS fund structure and is passionate about investing in early-stage technology companies. For over 20 years, they have offered private investors and their advisers access to some of the most impactful technology companies in sectors which the UK is considered a world leader like fintech, digital health, robotics and e-commerce.
Born in San Francisco and Paris, Partech is one of the most active tech investors in the world, bringing together capital, operational experience, and strategic support for entrepreneurs at seed, venture and growth stages. The current portfolio is made up of over 200 companies in more than 30 countries, of which 16 are valued at more than $1bn, including Alan, Jellysmack, ManoMano, Merama, People.ai, Rohlik, SellerX, Sorare, Toss, Wave, Xendit and Zepz.
Praetura Ventures support entrepreneurs with a ‘more than money’ approach. It actively supports the founders of the companies they invest in, using experience, network and resources to help them grow and succeed. Since 2021, Praetura has appointed industry heavyweights from Apple, Social Chain, Dr Martens, Co-Op Bank and a number of exited founders to help mentor and support founders to help them grow the best business they can. Their team of 40 are based in Manchester and have a bias towards Northern-based tech and life sciences businesses
QVentures is a venture capital firm investing in startups from Seed to Series C. Its investors consist of family offices, institutional investors, wealthy individuals and exited founders.
QED is focused on investing in early stage, disruptive financial services companies in the US, UK and Latin America. Closed two new funds totaling $925m in May — capital that it will be using to back early-stage fintech startups, as well as growth rounds for later stage companies.
Focused on proptech, cleantech and fintech.
Sprints Capital provides growth capital to category winning, technology enabled companies. They make long-term focused investments in companies that have strong market positions and are managed by excellent teams with a passion to over-deliver to all their stakeholders
Target Global invests in fast-growing digital-enabled businesses operating in B2C and B2 SMB markets.
The growth fund invests in Series B and later stage companies (both primary and secondary), with an investment range of $5m – $3m. The seed stage fund invests in late seed and early Series A rounds, with an investment range of $2,000 – $5,000. We’re an international VC headquartered in Berlin with over €800m in assets under management, focusing on fast-growing tech companies across their lifecycles. With offices in London, Tel Aviv and Barcelona, Target connect the key European start-up ecosystems.
As a private equity investor in high-growth UK and Northern European SMEs valued between £10m and £200m, Tenzing work with niche market leaders and challenger businesses – ones that can transform themselves and disrupt the market in which they operate.
Velocity Capital is a pre-seed/seed London based Venture Capital firm operating in the SEIS / EIS space, focussing on innovative challenger brands targetting the future consumer. Central to the velocity approach is identifying businesses that can be transformed through marketing and in particular digital marketing. Velocity is a multidisciplinary team, combining recognised marketers, entrepreneurs and traditional fund managers, the experience of which we look to bring to bear on the businesses we invest in, providing value beyond the provision of capital.
Telefónica’s innovation arm with more than 550 active portfolio companies, 35% of which are working with Telefónica.
A full directory of UK VC firms can be found in the Growth Business directory, here.
More on fintech investment
New fintech body eyes pension-backed growth fund –Economic minister says Government-backed national fintech hub will help UK become a ‘technology and science superpower’
