UK fintech sector resilient despite 2022 global investment drop

Investment down 30% year-on-year but UK a beacon in troubled times.

Global investment in fintech fell 30% in 2022 from the 2021 figure, but the US and UK remain by far the biggest markets for investors, with India and Singapore talking third and fourth ranking. The fintech sector attracted $92bn in venture capital in 2022.

The figures are revealed in the latest report from UK fintech industry body Innovate Finance, with the drop in global investment from 2021’s figure of $130bn taking the spotlight. That drop was in evidence across early-stage VC investment – down to $23.3bn from $31.5bn – and late stage – down to $50.5bn from $82.4bn.

But seed investment rounds showed an uptick, with $7.5bn committed, compared with $5.8bn raised in 2021.

Global market up 8%

The report provides evidence of a sharp slowdown in sector investment over the year, with the US hit particularly hard. Innovate Finance figures show global fintech investing rose 8% on H1 2021 in the first half of the year. But US investment shrank 10% to $39.2bn, while the UK attracted a 24% rise, receiving $12.4bn.

Total VC funding was $63.8bn by July 1, but Q3 2022 saw just $16.4bn invested, with $11.8bn committed in Q4. That’s a 61% drop on the H1 figure in the second half of the year.

Contextualising the figures, Innovate Finance says: “Such declining figures are not exclusive to the FinTech industry, as the drop in investment levels is rooted in macroeconomic and geopolitical circumstances. Macroeconomic evidence suggests that three concurrent recessions across major international markets (China, Europe, the US) are to blame for the total global slowdown.”

Source:, Graphic: Martina Lindberg

Sector resilient

The top 10 ranking of fintech investment markets shows a wide geographical spread, with the US and UK firmly established in the top two positions. And, despite the economic turmoil in the UK, the country’s fintech sector has proved resilient. While the global market shrank by 30%, the UKs was only down 8%, and the country netted more VC investment in fintech than the next 13 European markets combined.

Swedish payment company Klarna, German investment firm Trade Republic, Italian payment company ScalaPay, and French payment company Qonto were the four deals outside the UK and USA to make the list of top 10 VC deals. UK-based wealth management platform FNZ tops the list with a $1.4bn deal.

Source:, Illustration: Martina Lindberg

Gender gap

Starling Bank secured the biggest investment of any female-founded fintech, netting $170m. Female-founded and led fintechs accounted for 9% of all VC activity in UK fintech, with a large drop in the number of deals at seed stage in fintechs driven by women – just $8.8m was invested in 4 deals in 2022, down from $49m invested in 19 deals in 2021.

The report also sets out figures showing that “while UK FinTech has enjoyed stronger growth than other sectors in recent years, it is also subject to the same cyclicality of wider VC investment and IPO issuance”. The authors suggest this means that there is some volatility ahead, but expect the market will recover along with other capital markets over the next two years.

The full report is available on the Innovate Finance website.