UK fintech investment slips to $7.2bn in H1 2025 as market cools

UK fintech investment reached $7.2 billion in H1 2025, a 5% decline on the $7.6 billion recorded in the same period last year, according to KPMG’s latest Pulse of Fintech report.

The slowdown reflects a broader tempering of investor appetite amid geopolitical uncertainty, market volatility and concerns over global economic growth.

The headline figure was underpinned by several high-value transactions.

BlackRock’s $3.1 billion acquisition of private markets data specialist Preqin was the largest UK deal, followed by $500 million funding rounds for cross-border payments group Rapyd Financial Network and wealth-tech platform FNZ.

Deal volumes

Deal volumes ticked up modestly year-on-year, with 216 UK M&A, private equity and venture capital transactions in H1 2025, compared to 198 in H1 2024.

However, activity slowed sharply in Q2: investment fell from $5.2 billion across 125 deals in Q1 to $2 billion across 91 deals in Q2.

Despite the softening, the UK remains Europe’s undisputed fintech capital, attracting more funding than the rest of the EMEA region combined.

Total EMEA investment rose to $13.7 billion across 759 deals—up from $11.1 billion in H2 2024—making it the only major geography to record growth in the period.

Notable non-UK EMEA transactions included Bridgepoint’s $1.6 billion buyout of French cloud platform Esker.

Global Funding

Globally, the first six months of 2025 marked the weakest period for fintech investment since early 2020.

Total global funding fell to $44.7 billion across 2,216 deals, down from $58.4 billion in the previous half-year.

M&A deal value dropped from $26.7 billion to $19.9 billion, while private equity investment slid to $1.3 billion.

Venture capital, however, remained broadly stable at $23.4 billion.

Sector-wise, crypto, artificial intelligence and regulatory technology (regtech) are outpacing 2024’s levels.

Crypto companies secured $8.3 billion in H1 alone—compared to $10.7 billion for the whole of last year—while AI ventures attracted $7.2 billion, close to 2024’s annual total of $8.9 billion.

Hannah Dobson, UK Head of Fintech at KPMG, described the sector as “resilient” in the face of macroeconomic headwinds, noting upcoming initiatives such as the Financial Conduct Authority’s partnership with Nvidia to create a sandbox for AI and enterprise computing applications in financial services.

Looking ahead, Karim Haji, KPMG’s Global Head of Financial Services, said digital assets and currencies were “well positioned” for further growth in H2 2025, adding that the market will be watching closely to see whether Circle’s successful IPO prompts a wave of crypto-related exits.