UK FinTech 2024, Startups and Venture Capital: Thriving and Resilient

Full blog post: https://6degreescapital.substack.com/p/uk-fintech-2024-startups-and-venture

In the UK, there is a lot to be excited about:

- There are a large number of local and foreign investors with offices on the ground in London
- There is circa $5bln in newly raised capital from leading FinTech investors such as QED, Balderton, Index, Northzone, Accel and 6 Degrees
- The UK has the most mature ecosystem for FinTech investment, by some measures 3-4x larger than its closest rivals, Paris and Berlin
- There are 30+ FinTech unicorns or near unicorns, and over 200+ exits since 2005
- Revolut and Transferwise have both scaled revenue to $1bln+ and are profitable
- Large FinTech companies are minting “mafias” or new founders of startups who learned the ropes at the UK’s leading startups
- The UK attracts a large share of the growth equity flowing into Europe

If you would like to read about the above, and more, including startups we have identified as “startups to watch”, top FinTech investors and the trends affecting our ecosystem, read on to learn more!

1. UK FinTech 2024, Startups and Venture Capital
Thriving and Resilient
[email protected]

2. UK FinTech funding, on the path to recovery after a buoyant 2021 - 2022
2
Atomico State of EU Tech 2023 (including non-FinTech)
£0bln
£1bln
£2bln
£3bln
£4bln
Q1 2020
Q2Q3Q4
Q1 2021
Q2Q3Q4
Q1 2022
Q2Q3Q4
Q1 2023
Q2Q3Q4
Q1 2024
Q2
0
30
60
90
120
2014201520162017201820192020202120222023 7 48 108 32 31 38 21 23 27 23
UK FinTech Funding Trailing 3 years Number of “new” European unicorns
3x increase
CBinsights FinTech Q2 2024

3. Revenue multiple expansion (rather than revenue growth) drove the market in 2021
3
Average Revenue Multiple for Public FinTechs (US) Number of VC backed FinTech US/UK IPOs/SPACs
Q4 2018Q2 2019Q4 2019Q2 2020Q4 2020Q2 2021Q4 2021Q2 2022Q4 2022 4x
6x
13x
20x
17x
12x
10x
9x
6x
Increased optimism and valuations drove major tech exits in 2021
20162017201820192020202120222023 2
9
54
21
13
16
14
8
State of Fintech 2024 Europe & US focus, DealroomReimagining the Future of Finance, BCG + QED Investors

4. Leading to a dramatically different fundraising environment for entrepreneurs
4
Is it harder to raise venture capital in Europe
(inc UK) than it was 12 months ago?
2021 2022 2023 80%
82%
18%
80% of respondents say yes!
Atomico State of EU Tech 2023
Funding by stage for FinTech companies, 2021 vs 2022
SeedSeries ASeries BSeries CSeries DSeries E -72%
-48%-48%
-38%-37%
-24%
Reimagining the Future of Finance, BCG + QED Investors
Late stage investments hit particularly hard

5. Early signs of a recovery as European funding metrics improve in H1 of 2024
5
H1 2023 H1 2024 £3.8bln
£3.3bln
+14%
Funding amounts H1 2023 vs H1 2024 Average deal size H1 2023 vs H1 2024
H1 2023 H1 2024 £16.4m
£9.2m
+77%
Blackfin FinTech Wrap-up Blackfin FinTech Wrap-up

6. Largest funds (by number of portico’s) with FinTech investments, ordered by number of FinTech investments. Data source is Crunchbase unless coming from the firm directly. Editors choice in some cases.
The UK benefits from a large number of local and foreign FinTech investors
6 9
11
6
12
2
12
465
11
959
1919
77
16
8
13
8
28
2221
1717
3
19
39
7
1516
9
24
3
16
11 111213131313
15151616
18
212122232425252626
282829
3233
36
4646
62
66
69
7374
83
96
108
129
TOTAL NUMBER OF FINTECH INVESTMENTS
NUMBER OF FINTECH INVESTMENTS IN THE UK
Funds with offices in the UK in order of number of FinTech investments

7. Editors choice of recently raised funds that are investing in UK FinTech
And significant dry powder from newly raised funds
7
Editors choice of new VC funds investing in British FinTech
Fund X €1.1lbn (2022)
Early Stage VIII &
Growth II, $925m (2023)
Fund III €150m (2024)
Fund VIII $650m (2024)
Fund III €150m (2024)Fund IV $80m (2024)
Fund XII $2.3bln (2024)
$615m Early Stage Fund
IX & $685 Growth Fund III

8. FinTech investors by stage, active in the United Kingdom
8
Pre Seed
Growth
Multistage firms that participate in rounds from Seed to Series B and beyond
Editors choice
v

9. Who to know for Seed - Series B in UK FinTech
9Editors choice
Thomas Olszewski
Lucas Stoops
Thibault D'hondt
Rob Moffat
Daniel Waterhouse
Rana Yared
Tim Levene
Reginald de Wasseige
Thomas Olszewski
Wouter Volckaert
Thibualt D’Hondt
Reshma Sohoni
Carlos Eduardo Espinal
Sia Houchangnia
Yusuf Ozdalga
Jan Hammer
Giacomo Genzini
Carlos Gonzalez-Cadenas
Rory Stirling
Pietro Pezza
Sitar Teli
Sonali De Rycker
Andrei Brasoveanu
Luca Bocchio 
Josh Bell
Evgenia Plotnikova
Henry Mason
Jeppe Zink
Deep Rana
Pieter-Jan Van Haute

10. UK has emerged as the dominant player in European startups and venture capital
10
London
Paris
Berlin
Stockholm
Amsterdam
Zurich
Madrid $121
$190
$314
$445
$510
$766
$3,400
2023 UK FinTech funding by European City (in $M)
UK
Germany
France
Sweden
Switzerland
Spain
Ireland $146
$222
$374
$449
$840
$847
$4,000
2023 UK FinTech funding by European Country (in $M)
State of Fintech 2024 Europe & US focus, Dealroom State of Fintech 2024 Europe & US focus, Dealroom

11. With 35+ FinTech unicorns and soon-icorns
11https://sifted.eu/articles/meet-europes-fintech-soonicorns-2, editors picks

12. And 200+ British FinTech exits since 2005!!
12Crunchbase data. FinTech acquisitions since 2005. Valuations from various online sources. Editors choice.
$650m
$962m
Undisclosed
$67m
(partial exit) £700m
£144m
£8bln IPO
$150m
$979m
$200m
$32m
$300m
£53m
£53m
est$200m
est$200m
<$50m
£70m

13. an incredible British FinTech success story
13https://cdn.revolut.com/pdf/annualreport2023.pdf
2020 2021 2022 2023 £1,798m
£923m
£638m
£222m
2020 2021 2022 2023 £438m
£-25m
£40m
£-221m
Revenue Profit Before Tax
Valuation est $40bln
38m retailer customers, £18bln in customer balances, 8000+ employees

14. an incredible British FinTech success story
14Wise 2024 Annual Report
2021 2022 2023 2024 £1,172m
£892m
£553m
£419m
2021 2022 2023 2024 £481m
£146m
£44m£41m
Revenue Profit Before Tax
£8bln IPO in 2021, current market cap £7bln
13m customers, £13bln in customer balances, 5000+ staf

15. New cohorts of entrepreneurs ('mafias') emerge from successful FinTechs
15Sifted: GoCardless, Transferwise, Digital Bank Mafia
67 'Revolut start-ups' raised $451M from 152 VCs

16. UK attracts a large share of Europe’s growth equity rounds
16
CBinisights State of Fintech Q1’24 Report and Q2’ 24
Global Top Equity Deals H1 24’
2 of the largest private FinTech companies are in the UK
$580m
$150m
$110m
$110m
$100m
$11bln
$33bln
$10bln+
A large share of growth equity flows into UK
$135m
$100m
$85m
$85m

17. Crypto companies are increasingly active in the FinTech VC space
17CBinsights FinTech Q1 2024
Number of portfolio companies
167
123
242
373 73
44
69
116

18. Some trends we are following
18
OPEN BANKING PAYMENTS
INSURANCE AUTOMATION
EMBEDDED FINANCE & INSURANCE
AI DRIVEN AUTOMATION
HR FINTECH SOLUTIONS
BANK INFRASTRUCTURE
Editors choice
FINANCIAL CRIME SOLUTIONS

19. 19Editors choice
Emerging markets
payments
Open banking
payments
Enterprise spend mgmt
Short term rental
insurance
Tools for freelancers
Payroll with rewards
Credit Card
Open banking
payments and identity
Credit Bureau
Payments
data
Inventory management
Loan management
That’s the one,
wedding management
AI quality assuranceCrypto payments
On chain
securitisation
Climate focused
Neo-bank
Insurance for gig workers,
contractors and SME’s
FX options trading
venue
Wealth management
Early stage startups to watch in the UK

20. Thank you!
[email protected]

21. Sources
CBinisights State of Fintech Q1’24 Report
https://www.cbinsights.com/research/report/fintech-trends-q1-2024/
Atomico State of European Tech 2023
https://stateofeuropeantech.com/
Reimagining the Future of Finance, BCG + QED Investors
https://www.bcg.com/publications/2023/future-of-fintech-and-banking
State of Fintech 2024 Europe & US focus, Dealroom
https://dealroom.co/uploaded/2024/03/Dealroom-Fintech-2024-Europe-US-report_ABN-Amro_Motive-Ventures_26032024.pdf?x90202
Crunchbase Pro
Exits: Announced After 2005, description contains FinTech, HQ includes United Kingdom
UK based VCs in order of Total number of FinTech investments: Created list of UK domiciled funds with FinTech investments then searched
each fund for number of FinTech investments. Internal data is used for 6degrees.
Wise 2024 Annual Report
https://wise.com/imaginary-v2/images/3f1628373b212ca54c1ac73c68d69b72-WISE-2024-Annual-Report-and-Accounts.pdf
Sifted
https://sifted.eu/articles/digital-bank-mafia
https://sifted.eu/articles/the-transferwise-mafia
https://sifted.eu/articles/gocardless-founders-factory-meet-the-10-former-employees-turned-founders
https://sifted.eu/articles/meet-europes-fintech-soonicorns-2
FinTech Wrap from Blackfin Capital
https://blackfintech.substack.com/p/h1-2024-fintech-wrap-up
If you wish to suggest any changes to the content please contact [email protected]
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