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The Actuary The magazine of the Institute & Faculty of Actuaries

More UK-based FinTech unicorns than in the rest of Europe combined

The UK has more financial technology companies valued at a billion dollars or more than any other European country, and is only behind China and the US globally, according to a report by GP Bullhound.

"UK at the forefront of the FinTech revolution" ©Shutterstock

FinTech: Anything but alternative reveals that the UK has four of these ‘unicorn’ companies, with a combined value of $18.5bn (£14.4bn), while Sweden and the Netherlands each have one valued at $2.3bn.

Previous research suggests that Britain’s leadership in FinTech comes despite its decision to leave the EU, with nine of the UK’s top 20 deals last year completed after the referendum result.

“We have the time zone, the language, the legal system, the talent, the world’s number one financial centre, and the fastest growing tech centre in Europe,” Chancellor Philip Hammond said in a speech last week.

“Our FinTech sector generated almost £7bn in revenue last year, but we cannot rest on our laurels. We must constantly move onward to remain the best place in the world to start and grow a tech business.

“So I urge innovators, investors, and regulators to help us keep the UK at the forefront of the FinTech revolution.”

The regional distribution of global FinTech unicorns is shown below (value in $bn):

Unicorns regionally
Source: GP Bullhound

Five of these 39 FinTech companies achieved this valuation last year, with global venture capital investment into the sector rising almost fivefold in the past three years to reach $13.6bn, according to the GP Bullhound report.

Asia attracted the most amount of investment in FinTech companies last year, reaching $7.1bn, largely due to the record-setting $4.5bn funding of China’s Ant Financial, and the region’s looser regulations and underserving by the traditional financial system.

Investment in Asia was more than in the US and Europe combined, which attracted $4.6bn and $1.4bn respectively, and is expected to continue to outpace the West, although funding in FinTech remains resilient worldwide.

“This research shows that FinTech has consolidated its position as an influential force in the global financial services industry,” GP Bullhound director, Claudio Alvarez, said.

“It has attracted substantial investment, created significant efficiencies for incumbent institutions, and redefined consumers’ experiences of financial services.”

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