Thursday 08 January 2026 2:00 am
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Wednesday 07 January 2026 7:12 pm
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UK fintech reigned supreme in Europe. (Image generated by Google Gemini).
The UK tightened the grip on its European fintech crown in the last year but came under growing pressure from fast-growing competitors ramping up their influence.
A surge in investment in the second half of 2025 helped UK fintech hold onto the second place spot for total investment.
The UK attracted $3.6bn (£2.7bn) last year, raking in more than the next five European countries combined but only edging above India at $3.4bn, according to the latest figures from fintech industry body Innovate Finance.
The final six months of 2025 included a 11 per cent jump when compared with the beginning of the year as $1.9bn was funnelled in.
Top deals included wealth manager FNZ’s $650m raise and payment firm Rapyd’s $300m. High profile investors in the rounds included the Fidelity Management and Blackrock funds.
“The UK has once again proven its credentials as a world-leading financial innovation and technology hub,” said Janine Hirt, chief executive of Innovate Finance.
“Other countries are quickly gaining pace however, and so to maintain our global lead it is imperative that we push ahead on delivering key regulatory reforms with speed, increase access to growth capital, and continue to foster an environment which is attractive for both domestic and international entrepreneurs and investors.”
The fintech lobby group has ramped up its efforts for regulatory reform in the last few months, taking aim at the banking watchdog for “hampering” challenger banks’ success.
Challenger banks are facing headaches from a “suite of existing and incoming rules” from the Prudential Regulation Authority which “contain logic-defying elements that disproportionately burden [them],” the body said.
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Economic Secretary to the Treasury, Lucy Rigby said: “UK fintech continues to show real strength and resilience, with an upsurge in investment in the second half of last year and the UK firmly established as Europe’s leading fintech hub.
“That momentum gives us confidence going into 2026 and I want to double down on it — backing UK innovators and wealth creators, and ensuring investment flows to the fintechs that will drive this country’s future prosperity.”
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France topped the rest of Europe at $1.1bn from 127 deals while Germany scored second with $1bn from 149 deals.
The US continued to triumph among the pack last year after racking up $25.1bn, making up nearly half of the global investment which rose 21 per cent to $53bn.
In the first half of 2025, the UAE overtook the UK after a whopping $2bn capital raise by the world’s largest cryptocurrency exchange Binance.
But muted second half activity left the UAE totalling $2.5bn before switching back positions with UK and being ousted from a top three spot by India.
Meanwhile, London’s fintech giants continued their march higher with Revolut notching the $75bn mark after a secondary share sale, which included cash injection from chipmaker Nvidia.
Digital lender Starling was also understood to be eying a valuation of £4bn in its first share sale since the group’s valuation was cut by fund manager Jupiter after offloading its stake in 2023.
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