Here at the Forsyth Group we have been working with a lot of Fintech startups in recent times, and we have really noticed a momentum building in the sector. Silicon Valley Bank have recently released a report on Investment trends in Fintech, with a lot of statistics that corroborate our recent experiences with Fintech companies.
The report opens by detailing the fact that the fourth quarter of 2014 was the busiest time in the history of this space, with 214 deals taking place globally. The biggest acquirers of new Fintech startups are more established Fintech and payments businesses, and this market saw 211 exits in 2014 alone, making it the most fruitful period of the last five years. Further stats also show that the UK is the hub of Fintech in Europe, with $539M of Venture Capitalist funding in 2014, amounting to half of investment in the whole of Europe in this area.
Perhaps the headline funding round in recent times has been Transferwise, with their recent Series C raising $58M, which is thought to value the company at around $1B. However, this is by no means the only big raise of 2014, with others such as Borro, Funding circle, Nutmeg, Zopa, Block Chain and Powa all raising large rounds as well (see graph below). With press coverage increasing, and the recent FinovateEurope 2015 conference showcasing numerous exciting UK Fintech companies, including our client Meniga who won a Best of Show award, we can only see this trend continuing into 2015.
More positive UK-related stats abound in this report. Fintech is currently worth £20B in revenue to the UK economy, with 18% of this coming from emerging businesses. Due to the City of London’s global reach and reputation, the UK has four Fintech incubators, and it is one of three sectors that the CBI predicts will be worth a combined £300b to the UK economy by 2020. The report points out that whilst Fintech may seem like a new ‘buzzword’, in fact the sector isn’t new. The UK has traditionally been somewhat behind in Fintech, but this is all changing now, with 60% of all Fintech startups in Europe now being based in the UK. With the current support networks in place, such as the aforementioned incubators and the large banking sector, this trend should also continue, and we look forward to watching this space grow.