- Fintech investment falls 20 per cent year on year.
- Revolut’s £2.2bn ($3bn) raise props up overall figures.
- Deal volumes drop as investors favour established firms.
Investment into Britain’s fintech sector fell sharply in 2025, hitting its lowest level in five years, even after a sizeable fundraising by Revolut.
New figures from KPMG show UK fintech firms attracted just under £8bn ($11bn) over the year, down from £9.8bn ($13.4bn) in 2024. That marks a fall of roughly 20 per cent, at a time when global fintech investment actually rebounded.
A significant share of the UK total came from Revolut’s £2.2bn ($3bn) raise in November. The deal, a secondary share sale, valued the digital bank at around £55bn ($75bn). Without it, the annual total would have looked considerably thinner.
Revolut’s funding round drew backing from Nvidia through its venture capital arm NVentures, alongside investors including Andreessen Horowitz, Franklin Templeton and T Rowe Price Associates. Outside the UK, the largest European fintech deal was a £119m ($150m) raise by Zurich-based lender Teylor.
Despite the downturn, the UK still attracted more fintech funding than France, Germany, Belgium, the Nordics, Ireland, China and Brazil combined, according to the data.
Fewer deals, bigger bets
While total global fintech investment rose to about £86bn ($116bn) from £71bn ($95.5bn), the number of deals dropped from 5,533 to 4,719. That suggests investors may be concentrating on larger, more established companies rather than spreading capital across early-stage start-ups.
Karim Haji, global and UK head of financial services at KPMG, reportedly said the sector was entering “a more balanced phase” in 2026, with greater focus on profitability and liquidity, as quoted in a news report.
Hannah Dobson, KPMG’s UK head of fintech, reportedly said Britain “must remain an investor friendly location” if it wants to keep its lead in Europe.
Regulation, retail investors and lingering frustrations
Chancellor Rachel Reeves has been pushing to channel more money from savers into stocks and bonds, with plans for high street banks to front an advertising campaign encouraging retail investment. The Treasury has framed the effort as a way to boost liquidity in London’s markets as they compete with Wall Street.
Dobson reportedly said there were early signs of “momentum return as regulatory clarity improves and market conditions stabilise”, as quoted in a news report.
Reeves has also sought to ease regulatory pressures for fintech firms. A new ‘Scale-Up Unit’, launched jointly by the banking watchdog and the financial regulator, aims to support growing firms. The first cohort, named earlier in July, includes Zopa Bank and OakNorth.
Even so, some in the industry continue to voice frustration about the pace of regulatory reform. With funding falling and dealmaking slowing, the coming year may test whether policy changes are enough to steady the sector.
