UK fintech investment declines despite efforts by Rachel Reeves to boost it
UK Fintech Sector Stabilizes Amid Global Shifts
In the first half of 2025, the global fintech industry is showing signs of stabilization, with a focus on digital assets, AI-enabled solutions, and regulatory technology (regtech). Globally, fintech funding reached around $44.7 billion across 2,216 deals, highlighting strong capital flow especially in late-stage and mega rounds, despite an overall decrease in deal volume as investors remain discerning.
The UK fintech sector, however, is showing broad stability but relatively flat growth. According to recent data, approximately $1.5 billion was raised in H1 2025, a figure that pales in comparison to rebounds in other European markets like France and Germany which saw a 28% uplift to $2.9 billion. The industry is described as undergoing a period of "recalibration," where investors move away from broad speculative bets towards fintechs with sharp execution, strong technology, sustainable revenue models, and AI-native infrastructures.
Chancellor Rachel Reeves has expressed a desire to make the UK the best place for fintech start-ups, scaling up, and listings. While no specific information about Reeves' plea for fintech listings was provided, the broader UK fintech climate is influenced by the government’s and regulators’ interest in making the UK a more attractive centre for fintech IPOs and listings. Efforts are being made to create supportive policies and market structures to encourage fintech companies to list on UK stock exchanges rather than moving abroad.
The UK's ambitions for fintech listings, however, received a setback when money transfer firm Wise announced it would ditch its primary listing in the UK. This decision by Wise, which is valued at around $11 billion, deals a blow to the London Stock Exchange and Reeves' fintech dream.
Amidst this, the Treasury announced a series of regulatory reforms as part of the Financial Services Growth and Competitiveness Strategy. The government plans to collaborate with the Office for Investment and Industry to establish a 'Listings Taskforce' to attract global businesses for London listings. This move is aimed at bolstering the UK's competitive appeal in the global financial ecosystem.
In the Americas, fintech investment fell to $27bn in the first half, a significant drop from $35.7bn in the second half of 2024. The competition for fintech listings is intense, with firms considering New York floats over London due to deeper pools of capital. Revolut's boss Nik Storonsky stated that a London listing was "not rational" due to the UK’s inability to compete with the liquidity offered by the US.
Despite these challenges, Hannah Dobson, head of fintech at KPMG UK, stated that the industry had shown "continued resilience" despite a challenging macroeconomic environment. The UK fintech sector, undergoing recalibration, is setting its sights on sharper execution and supportive regulatory frameworks to capitalize on listing ambitions, a focus likely aligned with Chancellor Rachel Reeves' intent to bolster fintech listings and maintain London’s competitive appeal in the global financial ecosystem.
[1] Global Fintech Investment Trends H1 2025, KPMG, link
[2] UK Fintech Sector Recalibrates Amid Global Shifts, TechCrunch, link
[3] Global Fintech Investment H1 2025: A Selective Yet Stabilizing Environment, CB Insights, link
[4] Fintech Investment in UK Steady But Requires Sharper Execution, Financial Times, link
[5] UK Government Announces Regulatory Reforms to Boost Fintech Sector, The Guardian, link
