Figures show that more than half a million dollars was invested into U.K. fintech companies during the first six months of 2017, over a third more than last year.
According to trade body Innovate Finance, this shows that the U.K. is managing to stay abreast of things despite the uncertainty of Brexit.
In the first half of the year, fintech companies raked in $564 million in venture capital investments, which is 37 percent up from figures during the first six months of 2016, according to The Independent. This figure, however, is still behind its $1.2 billion venture capital funding raised in 2015, but if fintech investments continue on their upward trend 2015 figures could easily be beaten.
After the U.K.’s vote to leave the European Union last June, many feared there would be a slow up with U.K. fintech investments, which would see the country losing its spot as a financial technology hub.
Many companies, however, have decided to move their headquarters out of the U.K., such as money transfer company TransferWise. In a bid to maintain hold of its access to the single market the company revealed in April that it would be moving its European headquarters out of London.
And yet, these latest figures from Innovate Finance show that the U.K.’s sector is still proving to be a promising one. So much so, that investment was up by around 50 percent on the second half of 2016 after the Brexit vote.
Innovate Finance’s chief financial officer, Abdul Haseeb Basit, said:
We saw a period of uncertainty over the summer last year but I would say that by around the third quarter, things were starting to recover.
In April, Chris Woolard, director of strategy and competition at the U.K.’s Financial Conduct Authority (FCA), said that there were fears about how the sector would cope after the Brexit vote.
He said: In the immediate aftermath of the EU referendum there was a concern that we would see the number of innovative firms wanting to operate in the UK fall.
In the run-up to the Brexit vote, the FCA had received 264 requests for regulatory support from companies. Since then that number has increased to more than 300.
Worries of Passporting Rights Ease
It was initially thought that financial technology companies would be hit by the loss of passporting rights, which gives one company licensed in the EU the right to trade freely in any other.
Now, though, that fear appears to have eased. According to Innovate Finance, if the U.K. loses its passporting rights this would only affect around 20 percent of the nearly 300 startups that are members of Innovate Finance.
Talent remains the number one concern and has been since the referendum, according to Basit.
It’s been a worry and until we have more certainty around that, it will remain a worry.
Posted by: Rebecca Campbell