The report shows the UK remains at the centre of European fintech investment with British fintechs attracting more funding than their counterparts in the rest of EMEA combined. 

The investment total was boosted by the record number of UK fintech deals completed; 603 M&A, Private Equity and Venture Capital fintech deals were finalised in the UK in 2021, up 28% from 470 in 2020.

The investment total was also strengthened by the size of many of the deals, which included the $14.8 billion Refinitiv deal in January 2021.

Five out of the ten largest fintech deals in the EMEA region were completed in the UK.

Total global fintech funding across M&A, PE and VC reached US$210 billion across a record 5,684 deals in 2021. Payments continued to attract the most funding among fintech subsectors, accounting for US$51.7 billion in investment globally in 2021 – up from $29.1 billion in 2020. A continued surge in interest in areas like ‘buy now, pay later’, embedded banking, and open banking aligned solutions has helped keep the payments space very robust.

Karim Haji, UK and EMA head of financial services at KPMG, said:

“2021 was an incredibly strong one for the UK fintech industry. The UK remains at the centre of European fintech investment with British fintechs attracting more funding than their counterparts in the rest of EMEA combined. Fintechs remain strategically important for the UK’s economic growth prospects and its vital that the ongoing work to nurture them continues if the UK is to remain a magnet for investment.”

“The EMEA fintech market also performed very strongly in 2021 with $77 billion of investment across the region. Record levels of investment were seen in in the Nordic region (US$18.5 billion), Germany (US$5.4 billion), Ireland (US$1.6 billion), Africa (US$1.8 billion), and Israel (US$900 million).”

Anton Ruddenklau, Global Fintech Leader, KPMG International, added:

“We’re seeing an incredible amount of interest in all manner of fintech companies, with record funding in areas like blockchain and crypto, cybersecurity, and wealthtech. While payments remains a significant driver of fintech activity, the sector is broadening every day.”

2021 Key global highlights

  • Global fintech investment was US$210 million across a record 5,684 deals in 2021 – up from US$125 billion across 3,674 deals in 2021.
  • Payments remained the hottest area of fintech investment in 2021, with US$51.7 billion in investment globally.
  • Record levels of investment were seen in blockchain and crypto (US$30.2 billion), cybersecurity (US$4.85 billion) and wealthtech (US$1.62 billion) in 2021.
  • Other fintech areas also saw robust funding in 2021, including insurtech (US$14.4 billion), regtech (US$9.9 billion).
  • Cross-border fintech M&A deal value more than tripled year-over-year – to $36.2 billion. Total fintech-focused M&A deal value rose from US$76 billion in 2020 to US$83.1 billion in 2021.
  • PE funding to fintechs more than doubled from its previous high – with US$12.2 billion in investment in 2021 compared to a peak of US$5.2 billion in 2018.
  • VC investment in fintech globally more than doubled year-over-year – from US$46 billion in 2020 to a record US$115 billion investment in 2021. Median VC deal sizes grew significantly for all deal stages between 2020 and 2021, including Angel and Seed US$1.4 million to US$2.2 million), Early Stage (US$4.6 million to US$7 million), and Late Stage (US$12.7 million to US$24.6 million).
  • Total fintech investment in the Americas reached US$105 billion in 2021, including a record US$64.5 billion in VC funding. The US accounted for US$88 billion of total funding and US$52.7 billion in VC funding. EMEA saw US$77 billion in fintech investment in 2021, including a record US$31.1 billion in VC funding. Fintech investment in the Asia-Pacific region almost doubled – from US$14.7 billion in 2020 to US$27.5 billion in 2021.
  • Corporate VC investment in fintech was incredibly robust in 2021 at US$50 billion, with both the Americas (US$29.7 billion) and EMEA (US$11.3 billion) seeing record levels of investment.

Source: KMPG

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