While most of the world experienced a slowdown in fintech investment in 2023, the UAE bucked this trend recording an increase in investment of 92% from the previous year.
According to data by Innovate Finance, an industry body which represents the fintech community in the UK, the UAE jumped from 24th to 6th position in the global rankings of fintech investment, in a year when many countries witnessed notable drops.
Globally, the total capital invested into fintech reached $51.2 billion in 2023, a decrease of 48% compared to 2022, when total investment amounted to $99 billion. The capital invested in fintech in 2023 was spread across 3,973 deals compared to 6,397 deals the year before.
Who are the top 5?
Overall, the US received the most investment, bringing in over $24 billion in fintech capital across 1,530 deals, with the UK firmly in second place with $5.1 billion, rounded off by India with $2.5 billion, Singapore with $2.2 billion and China with $1.8 billion.
Interestingly, in 2023 the UK received more investment in fintech than the next 28 European countries combined, the data revealed. The $5.1 billion in investment received by UK based fintechs were spread across 409 deals compared to $14.6 billion across 592 deals in 2022, a decrease of 65% from 2022. Despite being down 56% from 2022, London continues to be a leading global fintech investment hub with $4.5 billion received last year. According to Innovate Finance this drop in investment in the UK is on par with many other Top 10 markets. The US, for instance, saw a decrease in investment by 44% from 2022.
Janine Hirt, CEO of Innovate Finance, said: “The data demonstrates a clear opportunity for UK FinTechs to strengthen ties with rapidly growing markets in Asia – many of which entered the global Top 10 for the first time, and saw more combined investment than the European counterparts. The UK’s mature FinTech sector is well placed to develop stronger collaboration with the region, and create new commercial and scaling opportunities.”
These countries saw notable drops
Some countries witnessed notable drops in investment in 2023 including France, Germany and India, with France and Germany falling down the global rankings with drops in investment of 56% and 66% respectively. Of course, other countries like the UAE fared much better. In addition to the UAE’s stellar performance, Hong Kong was also a big winner in the fintech space last year, jumping from 27th to 9th position in the global rankings.
The value of the top 5 biggest deals globally in 2023 was over $9 billion or 19% of total global investment into fintechs, with Stripe receiving $6.9 billion, the largest investment of the year. According to data analysed, the other four largest deals from highest to lowest were Rapyd, Xpansiv, BharatPe and Ledger. Of these, Rapyd occurred in the UK.
In total, 59 deals were identified as being deployed into female-led fintechs. These netted $536 million which represents 10.5% of the UK total of $5.1 billion, a step forward for women founders/leaders.
