UK fintech companies have witnessed a 37% increase in funding in the first half of the year, despite concerns over Brexit.
British financial technology companies attracted an investment of $564m (£433m) from venture capital firms in the first six months of 2017, showed a report released by trade body Innovate Finance.
A significant part of the investment was from venture capital firms outside the UK.
With 102 fintech deals, the UK ranked third globally in total investment behind the US and China.
The top UK deals included Atom Bank, which secured $102m in funding, and Funding Circle, which raised $101m.
In the first half of this year, the bulk of the UK venture capital investment in fintech went to sectors such as alternative lending, challenger banks and wealth management.
Innovate Finance CFO Abdul Haseeb Basit said: “Despite the uncertainties of Brexit, the UK retains its position as a leading FinTech hub and has attracted more investment in H1 2017 than the same period last year. These investment figures are lower than H1 2015, signalling a slow return to pre-Brexit funding levels.
“The UK government needs to continue its support for the sector, by ensuring the country remains attractive to talent and investment, while also maintaining an open trading relationship with Europe and the rest of the world.”
Overall, venture capital investment in global fintech companies stood at $6.5bn in the January-June period, down 45% compared to the same period a year earlier.
The US attracted the most investment both in deal value and deal volume, with the country’s fintech companies raising $3.3bn in 357 investment deals.
According to the report, the top three global fintech deals took place in the US and China, with American firm SoFi raising the largest round globally at $453m.
Chinese firms AvidXchange and E-Life Financial stood at second and third spots, raising $300m and $275m respectively.
Basit said: “The investment data for the first half of 2017 shows that global FinTech investment is down verses the same period in 2016, however if you adjust for the exceptional mega-deals in China in H1 2016, where three companies, Alipay, Lufax.com and JD Finance, raised over $1billion each, we see that global investment has gone up 28.4%. The sector continues to thrive.”