London still attracts over 82% of FinTech investment capital but a closer look at the data shows that other parts of the UK are making progress. We had a closer look at the numbers and found that early-stage investments actually increased over the last three years.
Overall UK FinTech investments dropped by just over 15% last year
Investments in private UK FinTech companies dropped 15.4% last year from £1,113m in 2015 to £941m in 2016. Although this is a decrease over one year, the figure should be compared to the total of £622m in 2014, which shows that 2016 was still, relatively, a very strong year for UK FinTech.
Early-stage FinTech investments in the regions doubled over three years
Between 2014 and 2016, investments in FinTech companies based outside London increased from £157m in 38 deals to £168m in 36 deals and made up 17.9% of the total for the UK in 2016. This is a drop from the 25.2% share taken in 2014.
However, if you look more closely at the numbers some positive indicators become apparent. By excluding investments over £10m from the regional data, the analysis shows that £34.5m was invested in 2014, £44.9m in 2015 and £67.9m in 2016. That’s almost a doubling of sub-£10m investments over three years, which clearly shows healthy growth for the early-stage segment of the FinTech market outside London.
Manchester, Cambridge and Edinburgh lead the city rankings
Some cities are clearly making good progress. Manchester, Cambridge and Edinburgh may soon be able to claim to be up-and-coming FinTech hubs. Of the 107 FinTech investments made outside London between 2014 and 2016, 13 were completed in Manchester, 12 in Cambridge and 7 in Edinburgh.
Whilst these cities are doing well, some of the places that are attempting to declare themselves as the UK’s second FinTech city have quite a bit of work to do to generate more interest from early-stage investors before they can legitimately qualify for that title.