Fintech funding in the UK remained ahead of the levels seen in Europe and Asia amid a sharp global slowdown, but still decreased about 8% compared to its 2021 value
Recent data from the industry body Innovate Finance revealed that UK fintech sector attracted $12.5 billion worth of investors’ capital in 2022, down 8% from $13.5 billion recorded in 2021.
Global VC investment slowed down last year due to the rising interest rates, surging inflation and economic uncertainty caused by the war in Ukraine. Thus, global investment in fintech dropped by 30% from 2021, reaching $92 billion.
Compared to the worldwide decline, UK fintech funding seems to maintain pretty good condition. The UK still holds the second position in the global VC ranking, following the USA and outpacing India in third place.
Globally, the VC investment slowdown was registered in both early and late-stage funding rounds. Venture funds deployed $23.3 billion into the earlier stage fintechs vs $31.5 billion in 2021 and $50.5 billion into late-stage fundraisers, compared to $82.4 billion in 2021.
However, seed investment rounds performed better than expected, surging to $7.5 billion in 2022, compared to the $5.8 billion they raised in 2021. Meanwhile, the growth and expansion private equity deals in 2022 attracted $10.7 billion, pretty much the same as in 2021.
The investment decline was characteristic of most industries last year. For instance, Innovate Finance assessed VC funding across 10 technology verticals, including SaaS, Artificial Intelligence and Life Sciences and found that VC activity in these sectors dropped by 56% from 2021 to 2022.