Service: Deal Advisory 

Sector: FinTech 

Industry update: FinTech 2022

25 Jan 2022

After a record year for UK FinTech deals, the sector is well-positioned to see significant growth. 

The adoption and implementation of technology becoming a priority for many market participants and progressive policymakers creates a supportive environment for FinTech innovation. 

The UK financial technology (FinTech) industry has demonstrated significant growth in recent years, with material evidence to suggest that the landscape is becoming increasingly mature while continuing to foster new high-growth subsectors. Some areas of the industry such as buy now, pay later (BNPL) and real estate lending platforms, have attracted significant attention from late-stage growth capital and public investors. 

The deal landscape also remains active for exits, including IPOs, and M&A, which further highlights FinTech's growing maturity, as notable players that were once promising start-ups, beginning to exit or consolidate. 

In our latest industry report, Gerald Edelman Partners, Carl Lundberg and Hemen Doshiupdate us on the progress of the FinTech industry since our last report on the sector in 2020. They provide an overview of the current activity and provide a breakdown of the market structure. They also analyse prominent trends within the sector to be aware of, notable deal activity, and an outlook for the near future. 

Key takeaways include:

  • As a longstanding global hub for financial services, with 300 of the world's banking headquarters housed here and progressive policymakers encouraging FinTech innovation, the UK provides a significant addressable market for businesses to tap into. 

  • The UK FinTech industry is highly fragmented and expanding rapidly. Industry revenue is expected to grow from £12bn in 2021 to £16.1bn by 2027, a 6% compound annual growth rate.
  • Research from Deloitte estimates there are c.2,500 FinTech businesses in the UK, which can be further split into 23 specialisms across an array of broad categories.
  • Data from UK Finance shows that the number of payments using notes and coins fell by 35% in 2020. This trend is further reflected through changes in regulation.
  • The UK FinTech industry is a key target for foreign investment. According to S&P Capital IQ, international private equity and venture capital investments accounted for 65% of total UK FinTech investment in 2021.
  • A key challenge for FinTech firms in 2022 will be standing out in a crowded market. This will be especially prevalent for new FinTech businesses, with many businesses likely competing with larger players offering similar platforms and services but with established customer bases.

To download our latest report, click below: 

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