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Fintech funding takes a global nosedive

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TLDR:

  • Global capital investment in fintech decreased by 48% in 2023 to $51 billion, according to Innovate Finance data.
  • The number of deals also decreased from 6,397 in 2022 to 3,973 in 2023.
  • The US received the most investment in 2023, followed by the UK, which still saw a 65% decline compared to 2022.
  • The top five largest deals globally in 2023 amounted to $9 billion.
  • There is an opportunity for UK fintechs to strengthen ties with growing Asian markets.

Global capital investment in fintech nearly halved in 2023 to $51 billion, with the UK seeing an even sharper decline, according to Innovate Finance data. The total capital invested into fintech globally reached $51.2 billion in 2023, a decrease of 48% compared to 2022, when total investment amounted to $99 billion. The funding was spread across 3,973 deals compared to 6,397 deals in 2022. The Innovate Finance numbers – which are in line with another recent report from Indian analyst group Tracxn – come as inflation, increased interest rates, geopolitical issues, and other macroeconomic conditions all hit valuations and deal activity.

Overall, the US received the most investment in 2023, bringing in over $24 billion in capital across 1,530 deals, but this was 44% down on the previous year. India received $2.5 billion, Singapore $2.2 billion, and China $1.8 billion. The UK maintained its second place with $5.1 billion across 592 deals – more than the next 28 European countries combined – but this was still 65% down on 2022.

The value of the top five biggest deals globally in 2023 was over $9 billion, or 19% of total investment into fintechs, with Stripe receiving the biggest injection, $6.9 billion. Rapyd, Xpansiv, BharatPe, and Ledger rounded out the top five.

The CEO of Innovate Finance, Janine Hirt, sees an opportunity for UK fintechs to strengthen ties with rapidly growing Asian markets. Hirt states, “The data demonstrates a clear opportunity for UK fintechs to strengthen ties with rapidly growing markets in Asia – many of which entered the global Top 10 for the first time, and saw more combined investment than the European counterparts. The UK’s mature FinTech sector is well placed to develop stronger collaboration with the region, and create new commercial and scaling opportunities.”

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