LONDON, July 8 (Reuters) – London-based fintech companies raised more funds from venture capitalists in the first six months of 2021 than any other year, demonstrating the resilience of the UK capital as a post-Brexit digital financial services hub proves.
Investors poured $ 5.3 billion into London fintech startups in the first half of the year, compared to $ 2.1 billion in the same period in 2020, according to new research by Dealroom and agency London & Partners.
The London boom followed rising fintech investment around the world as coronavirus lockdowns drove uptake of digital financial services, including payments and commerce
Fintech companies raised $ 54.1 billion worldwide between January and June, surpassing the total amount secured in the previous two years, the study found.
London fintechs made up a large part of European growth, accounting for over a third of the region’s funding.
Worldwide, the city of London ranks second behind San Francisco and just ahead of New York, according to the study.
Local entrepreneurs and investors said the numbers showed the UK capital could remain a leading fintech hub even after the country exits the European Union and the economic damage caused by the COVID-19 pandemic.
“Today’s investment figures are a vote of confidence in the UK fintech sector,” said Anne Boden, CEO of Neobank Starling.
Starling was one of the London fintechs to secure a major round of funding this year, raising £ 322 million ($ 444.88 million). Other large rounds included $ 478 million for payment company SaltPay and $ 450 million for payment company Checkout.com.
Despite the growth, concerns remain about the impact of Brexit, particularly with regard to access to talent and licenses.
“The loss of passporting after Brexit means that licensing and international expansion in London are no longer easy,” said Charles Delingpole, CEO of the startup ComplyAdvantage. “London must therefore move to a higher-value model that focuses on a global, rather than a European, hub role.”
The new research came about after a successful market debut by Wise, one of London’s best-known financial technology companies.
Wise stock opened at 800p on its debut on the London Stock Exchange Wednesday and hit a market cap of £ 7.95 billion, well above market expectations earlier this year. Continue reading
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Reporting by Anna Irrera in London; Adaptation by Barbara Lewis
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