12/01/24

FINTECH: Global fintech investment plummeted 48% in 2023, according to new data by Innovate Finance

As published on: fintechfutures.com, Friday 12 January, 2024.

The total global investment flowing into fintech reached $51.2 billion in 2023, a 48% drop from the previous year’s figure of $99 billion, according to data from UK industry body Innovate Finance.

The number of funding deals also considerably shrank, with capital being spread across a total of 3,973 deals compared to 6,397 deals seen in 2022.

The US retains the top spot for the most fintech funding received by a huge margin, bringing in $24 billion across 1,530 deals, followed by the UK in second place at $5.1 billion and India in third with $2.5 billion.

The UK’s $5.1 billion worth of funding in 2023 was spread across 409 deals, compared to $14.6 billion across 592 deals the previous year, reflecting a 65% drop from 2022.

Innovate Finance notes that this decrease in funding was in line with many other top fintech markets, including the US, which saw a 44% drop from 2022. One exception to this trend was the UAE, which recorded a whopping 92% rise in investments compared to 2022.

In the UK, female-led fintech companies attracted $536 million in 2023 across 59 deals, Innovate Finance says, representing 10.5% of the country’s total funding.

The industry body also notes that “the UK received more investment in fintech than the next 28 European countries combined” over the year.

“While economic headwinds presented a significant challenge for fintechs globally in 2023, it is encouraging to see how the UK fintech sector has shown great resilience by maintaining its position as a global hub for investment, second in the world behind only the US, and maintaining the leading position in Europe,” comments Janine Hirt, CEO of Innovate Finance.

Hirt adds that the data shows a “clear opportunity” for UK fintechs to strengthen their foothold in Asia markets – which notably saw “more combined investment than their European counterparts”.

“We remain confident the momentum of high-profile deals we saw in Q4 will continue well into 2024, as we anticipate a boost to the wider market,” Hirt adds.

Innovate Finance compiled and summarised its report using data from PitchBook as of 31 December 2023.

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FinTech FinTech investment