FinTech Investment Update H1 2016 and Post-Brexit

H1 2016

Global VC investment in FinTech for H1 2016 was up 148% YOY for the same period in 2015 at $13.2 B.

• For the first time China has outpaced US VC Fintech investment, led by a $4.5B AliPay round
• UK VC FinTech investment has slowed 33% YOY for the same period in 2015 at $386M
• Notable H1 Innovate Finance member deals include in MUSD: Transferwise $26M, Lendinvest $25M, Property Partner $22.6M, Azimo $15M, GoCardless $13M, Syndicate Room $4.5M, Lending Works $4.3M, and TransferGo $3.4M

CVC investment in FinTech, and Institutional investment in FinTech accelerators, partnerships, labs and consortia remains very firm with estimates from top tier global financial institutions in the range of $1–5M for the period.

Post Brexit

“Brexit clauses” were rumoured to have delayed funding for a small number of FinTechs in the UK directly following the 23 June vote.

Anecdotal evidence from US and UK based VCs indicates that Brexit has not affected material interest in investing in innovative UK FinTechs, and in some cases, USD and EUR denominated funds have seen value opportunities.

Since the Brexit vote, there are few visible signs that FinTech investment has slowed with Innfin member deals including: Crowdcube $9.1M, Meniga $8.2m, TransferGo $3.3M, Moneybox $1.8M, Huddlestock $1.9M, CreditKudos $.9M, RiskSave $.2M, and Onfido $undisclosed. Member Santander Innoventures, the corporate venture capital arm of Santander, increased the size of its fund by $100 MUSD.

Over 25 start-ups in the Innovate Finance membership are currently raising capital, seeking finance.

At this early stage the data indicates that many UK FinTechs appear largely unaffected by the referendum result, although the longer term effects of a potential single market exit and loss of financial services passporting status including access to talent remains to be seen — 30% of InnFin’s founders and CxOs are non-British.

Access to global STEM talent remains a strong requirement from the community and InnFin continues to lobby for a stronger Tier 1/2 Visa programme for STEM FinTech talent.

Full analysis to Q3 will be available in October.