Investment in the global FinTech industry dropped by 48 per cent last year to $51.2 billion compared to 2022, when funding reached around $99 billion.
According to industry body Innovate Finance, the capital in 2023 was spread across 3,973 deals compared to 6,397 deals in the previous year.
Over the 12-month period, the US received the most funding with $24 billion invested across 1,530 deals.
While the UK came in second place, investment dropped from $14.6 billion spread across 592 deals in 2022 to $5.1 billion across 409 deals last year. The decline represents an overall decrease of 65 per cent, with Innovate Finance explaining that the results were in line with other European countries, including France where investment fell 66 per cent.
It added that the UK received more investment in FinTech than 28 European countries combined.
Elsewhere, Singapore received $2.2 billion and China saw $1.8 billion invested in its FinTech industry. The UAE bucked the trend and saw an increase in investment of 92 per cent compared to 2022.
“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,” said Janine Hirt, chief executive of Innovate Finance. “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.”
Meanwhile, FinTech Scotland announced that FinTech jobs in the country have jumped by 24 per cent.
The management organisation attributed this to a number of factors including an increased number of FinTech SMEs and international businesses settling in Scotland as well as more companies reaching maturity.
FinTech Scotland added that collaboration with financial institutions and innovation labs are creating a nurturing environment in which product development is able to thrive.
"As we mark FinTech Scotland's sixth anniversary, we’re focused on building on the strong foundations that are enabling Scotland to continue to realise its fintech potential,” said Nicola Anderson, chief executive of FinTech Scotland. “Seeing the increase in SMEs and the growth in jobs is a testament to the FinTech businesses and the commitment from all involved in the FinTech Scotland Cluster.”
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