Innovate Finance has published figures showing UK fintech investment fell 37% to £3bn in 2024 compared to 2023.
The report shows a continuing decline in investment each year since 2021. In 2021, £10.57bn was invested in the sector, followed by £9.75bn in 2022. Investment dropped significantly to £4.7bn in 2023, and 2024, it further decreased to £3bn.
Understandably, the drop in investment within the UK’s fintech industry can be attributed to several factors, including the aftermath of the pandemic, rising interest rates, geopolitical instability and a reduction in funds from venture capitalists (VC).
However, both the current Labour government and the former Conservative government have expressed a strong focus on the fintech and financial sectors as key drivers for attracting investment to the UK and aiding economic recovery after the challenges of recent years.
Despite the significant drop in investment, the UK has maintained its leadership position, ranking second globally and first in Europe. It continues to attract more capital than any other country, apart from the US, and more than the next five European countries combined.
Steve Lemon, Partner of Volution, commented: “The 2024 market report highlights that the UK continues to dominate as the European leader in fintech, ranking second globally behind the USA, with both deal count and investment volumes surpassing the next five countries combined.
“This is a significant achievement and speaks volumes about the UK’s pioneering role in fintech. However, resting on these laurels could be detrimental. To maintain its leading position and capitalise on its current standing, the UK needs to continuously foster innovation and adapt to the evolving global financial landscape.”
Though there is more work to be done, the UK government can take some reassurance from the fact that this trend mirrors global patterns, with investment decreasing annually since 2021. However, there are signs of recovery on the horizon.
While the decline lasted for four years, global fintech investment showed a positive turn in the second half of 2024, with a 6% increase compared to the first half of the year, as noted by Lemon.
Although overall investment was lower in 2024, significant deals still took place, such as Monzo’s $621 million raise. Meanwhile, the US, the leader in fintech investment, continued to dominate with notable deals like Clear Street’s $685m funding, Bolt’s $450m raise and PayJoy’s $360m round.
On the flip side to this, some experts believe that the UK hasn’t yet “seen the bottom”.
Kevin Chong, General Partner of Outward VC, said: “We haven’t reached the bottom, particularly for pre-seed and seed stages. While overall investment in UK fintech in 2025 may turn out to be higher than 2024, pre-seed and seed stages will receive a comparatively lower share.”
Taking a more positive standpoint than Chong, James Codling, Managing Partner of Volution, added: “Determining if the market has truly hit its lowest point remains challenging, but there’s no denying that we’re seeing some signs of stabilisation after the previous overvaluation.
“This emerging stability is strongly supported by advances in key technologies like AI and blockchain, which enhance efficiency and security in financial services. The future success of the UK fintech sector will largely depend on ongoing regulatory support and the continuous innovation and effective execution by UK fintech firms within the highly competitive global arena”
