UK trumps Germany for FinTech investments in Q1 2017

Investments into UK-based FinTech companies in Q1 grew over 80% compared to the first quarter of last year.

Research from FinTech Global shows that despite the Brexit vote investors continue to commit more capital to UK FinTech companies. In fact, investments grew 81.7% YoY from $284m in Q1 2016 to $516m in the opening quarter of this year. In the same period investments in Germany, the UK’s main FinTech competitor in Europe, increased by only 42.5%.

  • Investments in both German and UK FinTech companies hit five-quarter high’s in Q1 2017 with $218m and $516m amount invested, respectively.
  • Both UK and Germany raised nearly half of their total respective funding for 2016 in the opening quarter of the year. Therefore, FinTech investment in both countries is on track to surpass the value invested last year.
  • UK-based FinTech companies have received more than twice the overall capital committed to German FinTech companies since the start of 2016.
  • UK FinTech investments in Q1 was driven by the $101.8m round raised by Atom Bank while Germany’s largest deal went to deposit marketplace startup Raisin which raised $32m Series C round.

Germany fails to capture larger share of FinTech investments compared to the UK

  • The biggest redistribution of capital going to FinTech companies happened way before the Brexit when Germany’s share of investments compared to the UK went up from 12.1% in 2014 to 26.6% in 2015.
  • UK’s share of capital going to FinTech companies remained relatively stable at just over 70% despite the turbulence of the Brexit vote last year and the headlines that FinTech startups are moving to Berlin.
  • In fact investors seem to have eased their worries over Brexit and Q1 2017 saw the return of large deals after they saw a considerable decline last year as reported by FinTech Global. Alongside Atom Bank, Funding Cirlce also raised in excess of $100m in the first quarter of the year for its SME lending platform.

The UK attracted more investments than Germany across all subsectors of FinTech, except InsurTech, since the start of 2016

  • Marketplace Lending companies have received the most funding in the last five quarters in both countries
  • The InsurTech subsector in Germany attracted over twice the amount invested in the UK, mainly driven by the activity of insurance corporate investors like Allianz and Munich Re.
  • Whilst WealthTech received the second largest total investments in the UK, the Infrastructure & Enterprise software subsector grabbed second place in Germany.

Germany’s FinTech industry has grown since 2016 and FinTech Global has identified more than 250 companies active in the country. However, the figures show that Brexit hasn’t had a significant negative impact on overall investment into UK-based FinTech companies. In fact, FinTech investment in the UK grew over 80% YoY in Q1 2017, almost double the rate recorded in Germany.

The data for this research was taken from the FinTech Global database. More in-depth data and analytics on investments and companies in Germany and the UK as well as across all FinTech sectors and regions around the world are available to subscribers of FinTech Global. ©2017 FinTech Global

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