London fintechs secure billions from US investors despite virus and Brexit uncertainty
London fintechs have secured $3.6bn in venture capital investment this year with more than half coming from US investors.
Fintechs received $2.2bn, more than 60 per cent of overall investment, through funding rounds with at least one US investor, according to data from Dealroom and London & Partners.
It is nearly double the US funding from last year, even as the capital’s startups grapple with the effects of the virus and the impending Brexit deadline.
Funding rounds including a US investor tend to be significantly larger in value than those without US backing. The average deal value involving US investors is $44m compared to $12m without.
One of the biggest funding rounds involving American investors this year was Revolut’s Series D round, involving US firms Technology Crossover Ventures and Ribbit Capital.
London is now the second most popular for global investment, behind San Francisco with $5.1bn and ahead of New York’s $2.2bn.
The capital also takes the top spot for deal count with 169 deals closed this year suggesting investors are still confident in London’s prospects even amid the pandemic.
Fintech remains one of London’s largest and best performing sectors, accounting for 44 per cent of all VC investment into London’s tech companies so far this year.
The sector appears to be weathering the storm of the virus with recent data from Beauhurst suggesting UK fintechs have avoided the worst of it.
Laura Citron, chief executive of London & Partners said: “The UK capital is a natural home for fintech because it combines the power of global financial markets with a deep tech talent pool, supportive regulation and an early-adopting customer base.”
While the capital’s fintechs are exploring the US for expansion, the last few months have seen notable US and Canadian firms confirm their commitments to the UK.
US fintech Plaid recently opened an office in Shoreditch, opting for London as their new home outside of the US and Canada.
Last week, Canada’s Clearbanc announced plans to launch in the UK and committed to investing £500m in e-commerce firms.
Keith Grose, head of international at Plaid said:”As a fintech company based in London you have access to investors, clients, world-class talent and savvy customers all in one city, making it a unique place to be.”