UK financial technology companies (fintechs) received $11.6bn (£8.6bn) investment last year as the sector bounced back following the slowdown in 2020.
But the good news was tainted by the growing gap between investments in fintechs led by men and women, with female-led fintechs receiving a lower share of the 2021 investment than in 2019.
According to the latest figures from Innovate Finance, investment was up by 207% compared to 2020, with the UK fintech sector outdone only by the US in terms of investment.
The increase mirrors the global picture, where the fintech industry saw an investment rise of 183%, reaching $102bn. In the UK, funds were invested through 713 deals.
The US saw the highest investment of $46bn, followed by the UK at $11.6bn. India was third ($6.3bn), followed by Germany ($4.4bn) and Brazil ($3.8bn).
The biggest UK deals in 2021 were investments in Revolut, Monzo, Copper, Checkout.com and Starling.
Janine Hirt, CEO at Innovate Finance, said the investment figures speak for themselves, “It’s been a superb year for fintech in the UK, and indeed all around the world,” she said. “The huge increase in funding levels is testament to the world-class innovation and ingenuity that is driving forward and positively transforming financial services.
“Fintech is delivering on all the biggest global trends and needs, including business productivity, consumer behaviours, financial wellness and inclusion, climate change solutions and cyber security – which is why it is such a magnet for investors.”
But female fintech founders are still struggling to gain a fair share of the funds being invested. Of last year’s total, only 9% went to female fintech founders, which, although more than three times higher that last year in terms of value, was about the same proportion as last year and was less than in 2019, when 13% of funds went to female-led fintechs.
Speaking to Computer Weekly late last year, Maria Scott, founder of fintech Tania, said there was a lot of work to do to level things up, but awareness of the issue was increasing.
“The key thing now is not to lose the momentum and to make sure it translates into real impact for female founders,” she added. “We need to keep working on this and keep attacking it on several fronts – role models, support structures of this type, continue to promote awareness and create new opportunities.”