Pulse of Fintech – UK perspective

• Total UK fintech investment decreased to £5.7bn in H1’24, from £8bn in H2’23. However, this is an increase from £1.9bn in H1’23.
• 198 UK M&A, Private Equity and Venture Capital fintech deals were completed in H1’24, down from 284 in H1’23, and down from 227 in H2’23. The largest fintech deal in the UK and Europe in H1’24 was the £3.1bn buyout of financial software company IRIS Software Group by Leonard Green.
  

Fintech investment in EMEA dropped to £8.8bn in H1’24, falling from £14.8bn in H2’23 amid continued geopolitical uncertainty and a high interest rate environment that has kept interest in large deals fairly muted. As previously mentioned, the UK saw the largest share of fintech funding in the region.

Fintech-focused Venture Capital investment in EMEA showed resilience in H1’24 compared to other regions, likely helped by small increases in investment in the UK, Germany, Nordics and Ireland.

Regulation remains a key focus in EMEA, particularly in the EU, with a focus on new and upcoming legislation on AI and Crypto. B2B focused fintechs are also attracting investor attention in the region, driven by their ability to produce recurring revenues.

As we progress into H2’24, we expect large financial institutions and fintechs to leverage AI to drive operational efficiencies and cost reductions. In addition, we predict a growing focus on AI-driven regtech and cybersecurity solutions including areas such as fraud prevention.  

The Americas attracted £27.9bn across 1,123 deals in H1’24. The EMEA region attracted £8.8bn across 689 deals, and the ASPAC region attracted £2.9bn across 438 deals.

Global fintech M&A investment at the end of H1’24 was somewhat ahead of the pace seen last year — with £25.3bn in deal value compared to the £45.6bn seen during all of 2023. PE investment, meanwhile, is well behind the pace seen last year — with just £760mn in global PE investment at mid-year, compared to £7.4bn in 2023.

The payments sector remained the dominant sector for fintech investment during H1’24, attracting £16.6bn in investment, with the buyouts of Worldpay and Nuvei accounting for £14.6bn of this total. AI also remains a major priority for fintech investors, particularly in the US.

Conversion rate accurate as of July 2024 from USD to GBP.