UK Fintech Funding Decreased by Nearly 40% in First Half of 2020

UK Fintech Funding Decreased by Nearly 40% in First Half of 2020

News No Comments on UK Fintech Funding Decreased by Nearly 40% in First Half of 2020

The fintech industry is taking significant hits due to the coronavirus crisis. Overall funding of UK firms has decreased by nearly 40% in the first half of 2020. Recovering from this deficit will not be easy. 

UK Fintech Funding Collapses

Compared to the first half of 2019, the year 2020 hasn’t been normal in the slightest. Other than a relatively month of January, everything else has turned out very different from what most people expected. A global pandemic wasn’t part of anyone’s predictions of expectations, to say the very least. As a result of this virus, all aspects of life and business have been affected in a negative manner.

Looking at the statistics for UK fintech funding, a significant decrease can be noted. Nearly 40% less funding has been collected in the first six months of 2020 compared to the same period a year prior. There have been plenty of other concerns other than fintech, for obvious reasons. Unfortunately for UK companies, that also means things are bound to get a lot harder for the foreseeable future. 

With just $1.84 billion being raised in the first half of 2020, the current outlook is not looking good. Other than a few major funding rounds by a handful of companies, nothing really exciting has happened. Funding rounds by just 4 companies represents 47% of the total amount raised across the UK. 

It is evident that investors are risk-averse when it comes to fintech funding. Any company without a proven track record or major business model will not receive too much financial support in the months to come. Now is not the time for investors to take risks, although it may force them to miss out on some unique opportunities as well. 

Competing Will Become More Difficult

Under the current circumstances, it will become more difficult for new companies to gain traction, That also means competition in the UK’s fintech scene may not head in the right direction. Established companies will collect the lion’s share of new funds, whereas everyone else will struggle.

Remaining in business may pose a lot of challenges for new UK fintech firms. That being said, there are still many business models to explore. Helping businesses adjust to digitization will remain a viable business model to pursue for some time to come. Any other business model may face a lot of challenges

With no immediate recovery of the UK economy in sight, This uneasy situation will remain in place. In fact, analysts expect the recovery process to take several years. Fueling competition in the UK fintech space needs to remain a priority. Unfortunately for a lot of companies, they may not survive the current market sentiment for much longer. 

The post UK Fintech Funding Decreased by Nearly 40% in First Half of 2020 appeared first on CryptoMode.

Click to read full article

Author

Leave a comment

Search

Back to Top