Sector maintains European dominance despite 5% decline as quarterly activity shows sharp contrast.
“Key initiatives to keep an eye on in the UK’s fintech scene in the next few months include the FCA’s partnership with Nvidia,” KPMG commented.
Britain's
fintech sector pulled in $7.2 billion during the first six months of 2025,
marking a modest 5% drop from the $7.6 billion raised in the same period last
year.
The
numbers, released in KPMG's Pulse of Fintech report, paint a picture of an
industry still grappling with macroeconomic headwinds and
geopolitical uncertainty that have dampened investor appetite since the heady
days of 2021.
Despite
the year-over-year decline, UK fintech companies completed 216 deals -
slightly up from 198 transactions in the first half of 2024. But the devil's in
the quarterly details: the first quarter saw a robust $5.2 billion across 125
deals, while the second quarter dropped dramatically to just $2
billion spread across 91 transactions.
Roberto Napolitano, Chief Marketing Officer at Innovate Finance
“The UK is
still leading in terms of capital investment in fintech after the US,” Roberto
Napolitano, Chief Marketing Officer at Innovate Finance, said when talking
to Finance Magnates' Jonathan Fine at FMLS:24.
Big Deals Drive Numbers In
The UK’s Fintech Sector
Several blockbuster
transactions helped prop up the overall figures. BlackRock's $3.1 billion
acquisition of private markets data provider Preqin dominated the landscape,
while cross-border payments company Rapyd Financial Network and wealth
management technology platform FNZ each secured $500 million funding rounds.
The UK continues
to outpace the entire rest of Europe, the Middle East, and Africa
combined when it comes to fintech investment. While other regions struggled,
EMEA actually grew from $11.1 billion in the second half of 2024 to $13.7
billion in the first half of this year.
Hannah Dobson, Partner and UK Head of Fintech at KPMG UK, Source: KPMG
"Although
UK fintech investment experienced a slight decline in the first half of the
year compared to 2024, it is encouraging to observe the continued resilience of
the UK fintech sector despite the challenging macroeconomic environment,"
said Hannah Dobson, KPMG UK's partner and head of fintech.
In a
separate report from recruitment firm Morgan McKinley and analytics company
Vacancysoft, it was noted that UK
fintech hiring is expected to rise by 32%, driven mainly by compliance and
cybersecurity needs.
Market Shows Caution
The numbers
tell a story of investor caution that's become familiar across financial
markets. Geopolitical tensions, market volatility, and broader concerns
about global economic growth have all contributed to what KPMG describes as a
more subdued investment environment.
Current
investment levels remain well below the pandemic-era peaks of 2021,
when cheap money and digital transformation drove valuations to record heights.
The contrast is particularly stark in the second quarter's performance,
suggesting investors are taking a wait-and-see approach to new deals.
Looking
ahead, Dobson highlighted the Financial Conduct Authority's partnership with
Nvidia as a key development to watch. The new regulatory sandbox will
let banks experiment with computing and AI software for testing purposes before
full deployment.
“Key
initiatives to keep an eye on in the UK’s fintech scene in the next few months
include the FCA’s partnership with Nvidia. The new sandbox will allow banks to
tinker with computing and AI enterprise software, primarily for testing and
research prior to deployment,” Dobson added.
The UK's
modest decline sits within a broader global fintech funding landscape that hit
$44.7 billion across 2,216 deals worldwide - the
slowest first half since 2020. While venture capital funding held steady at
$23.4 billion, merger and acquisition activity fell sharply from
$26.7 billion to $19.9 billion, and private equity investment dropped from $4.4
billion to just $1.3 billion.
The
Americas still led overall investment with $27 billion, though that represented
a significant decline from $35.7 billion in the same period last year.
Asia-Pacific saw an even steeper drop, falling from $7.3 billion to $3.9
billion.
Despite the
overall cooling, certain subsectors remained hot. Cryptocurrency companies
attracted $8.3 billion - already approaching the $10.7 billion raised in all of
2024. Artificial intelligence fintech drew $7.2 billion, while regulatory
technology companies also maintained strong momentum.
The figures
suggest the UK fintech sector is navigating the current environment better than
many global peers, though the sharp quarterly contrast indicates the
path forward remains uncertain as economic and geopolitical pressures continue
to weigh on investor confidence.
Britain's
fintech sector pulled in $7.2 billion during the first six months of 2025,
marking a modest 5% drop from the $7.6 billion raised in the same period last
year.
The
numbers, released in KPMG's Pulse of Fintech report, paint a picture of an
industry still grappling with macroeconomic headwinds and
geopolitical uncertainty that have dampened investor appetite since the heady
days of 2021.
Despite
the year-over-year decline, UK fintech companies completed 216 deals -
slightly up from 198 transactions in the first half of 2024. But the devil's in
the quarterly details: the first quarter saw a robust $5.2 billion across 125
deals, while the second quarter dropped dramatically to just $2
billion spread across 91 transactions.
Roberto Napolitano, Chief Marketing Officer at Innovate Finance
“The UK is
still leading in terms of capital investment in fintech after the US,” Roberto
Napolitano, Chief Marketing Officer at Innovate Finance, said when talking
to Finance Magnates' Jonathan Fine at FMLS:24.
Big Deals Drive Numbers In
The UK’s Fintech Sector
Several blockbuster
transactions helped prop up the overall figures. BlackRock's $3.1 billion
acquisition of private markets data provider Preqin dominated the landscape,
while cross-border payments company Rapyd Financial Network and wealth
management technology platform FNZ each secured $500 million funding rounds.
The UK continues
to outpace the entire rest of Europe, the Middle East, and Africa
combined when it comes to fintech investment. While other regions struggled,
EMEA actually grew from $11.1 billion in the second half of 2024 to $13.7
billion in the first half of this year.
Hannah Dobson, Partner and UK Head of Fintech at KPMG UK, Source: KPMG
"Although
UK fintech investment experienced a slight decline in the first half of the
year compared to 2024, it is encouraging to observe the continued resilience of
the UK fintech sector despite the challenging macroeconomic environment,"
said Hannah Dobson, KPMG UK's partner and head of fintech.
In a
separate report from recruitment firm Morgan McKinley and analytics company
Vacancysoft, it was noted that UK
fintech hiring is expected to rise by 32%, driven mainly by compliance and
cybersecurity needs.
Market Shows Caution
The numbers
tell a story of investor caution that's become familiar across financial
markets. Geopolitical tensions, market volatility, and broader concerns
about global economic growth have all contributed to what KPMG describes as a
more subdued investment environment.
Current
investment levels remain well below the pandemic-era peaks of 2021,
when cheap money and digital transformation drove valuations to record heights.
The contrast is particularly stark in the second quarter's performance,
suggesting investors are taking a wait-and-see approach to new deals.
Looking
ahead, Dobson highlighted the Financial Conduct Authority's partnership with
Nvidia as a key development to watch. The new regulatory sandbox will
let banks experiment with computing and AI software for testing purposes before
full deployment.
“Key
initiatives to keep an eye on in the UK’s fintech scene in the next few months
include the FCA’s partnership with Nvidia. The new sandbox will allow banks to
tinker with computing and AI enterprise software, primarily for testing and
research prior to deployment,” Dobson added.
The UK's
modest decline sits within a broader global fintech funding landscape that hit
$44.7 billion across 2,216 deals worldwide - the
slowest first half since 2020. While venture capital funding held steady at
$23.4 billion, merger and acquisition activity fell sharply from
$26.7 billion to $19.9 billion, and private equity investment dropped from $4.4
billion to just $1.3 billion.
The
Americas still led overall investment with $27 billion, though that represented
a significant decline from $35.7 billion in the same period last year.
Asia-Pacific saw an even steeper drop, falling from $7.3 billion to $3.9
billion.
Despite the
overall cooling, certain subsectors remained hot. Cryptocurrency companies
attracted $8.3 billion - already approaching the $10.7 billion raised in all of
2024. Artificial intelligence fintech drew $7.2 billion, while regulatory
technology companies also maintained strong momentum.
The figures
suggest the UK fintech sector is navigating the current environment better than
many global peers, though the sharp quarterly contrast indicates the
path forward remains uncertain as economic and geopolitical pressures continue
to weigh on investor confidence.
Damian's adventure with financial markets began at the Cracow University of Economics, where he obtained his MA in finance and accounting. Starting from the retail trader perspective, he collaborated with brokerage houses and financial portals in Poland as an independent editor and content manager. His adventure with Finance Magnates began in 2016, where he is working as a business intelligence analyst.
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We break down Blueberry’s regulatory structure, including its Australian Financial Services License (AFSL), as well as its authorisation and registrations in other jurisdictions. The review also covers supported platforms such as MetaTrader 4, MetaTrader 5, cTrader, TradingView, Blueberry.X, and web-based trading.
You’ll learn about available instruments across forex, commodities, indices, share CFDs, and crypto CFDs, along with leverage options, minimum and maximum trade sizes, and how Blueberry structures its Standard and Raw accounts.
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Watch the full review to see whether Blueberry’s trading setup aligns with your experience level, strategy, and risk tolerance.
📣 Stay up to date with the latest in finance and trading. Follow Finance Magnates for industry news, insights, and global event coverage.
Connect with us:
🔗 LinkedIn: /financemagnates
👍 Facebook: /financemagnates
📸 Instagram: https://www.instagram.com/financemagnates
🐦 X: https://x.com/financemagnates
🎥 TikTok: https://www.tiktok.com/tag/financemagnates
▶️ YouTube: /@financemagnates_official
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⚖ Balanced reporting
📞 Right of response
📰 Responsible journalism
#FinanceMagnates #FinancialJournalism #ResponsibleReporting #FinanceNews #EditorialStandards
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⚖ Balanced reporting
📞 Right of response
📰 Responsible journalism
#FinanceMagnates #FinancialJournalism #ResponsibleReporting #FinanceNews #EditorialStandards
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📰 Verified reporting
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✅ Facts over noise
