Date: 17 June 2024
Author: FINTECH Circle

Recently our Founder & Chair, Susanne Chishti talked about Fintech Trends at the Fintech Fringe event held at our partner office, Fox Williams. Excitement was expressed by Susanne Chishti as she shared insights on fintech investments. 

Three main components were highlighted about Fintech Circle:

Investor Network: 70 angel investors who invest their own money in fintech startups.
Global Community: Entrepreneurs, investors, and institutions interested in fintech.
Boardroom Influence: Helping startups become partners with listed companies.

Insights on fintech investment trends from both an investor and a board member perspective were shared.

Fintech Circle’s Investments and Success Stories

Numerous fintech startups have been invested in through the angel investor network. For instance, Cognizant, a standout in the portfolio, saw its valuation soar from $2.5 million to $80 million, delivering over 100x returns for investors. However, it was noted that the overall trend in fintech investments has been declining.

Global and UK Fintech Investment Trends

It was observed that from 2019 to 2023, global fintech investments dropped significantly. In 2019, investments were around $48 billion, but recent years have seen much lower figures. The first quarter of this year saw just $7.3 billion, projecting an annual total below $30 billion.

In the UK, investment trends have mirrored global declines. Over the past 60 years, it was noted that the UK has lagged behind other countries in investment as a percentage of GDP. This underinvestment compounds over time, impacting economic growth.

Historical Context and Current Trends

The fintech journey was traced back to the 1970s with credit cards, evolving through digitization and embedded finance. The UK’s fintech prominence surged around 2014 with initiatives like Level 39. Despite recent setbacks, such as the collapse of Silicon Valley Bank, fintech continues to offer growth opportunities, especially with advancements in AI and green technology.

Advice for Fintech Startups

Key advice was offered for startups, emphasizing the importance of managing cash flow carefully and starting fundraising early. It was suggested that reducing spending and preparing for extended periods without new funding are crucial. Despite the challenging environment, opportunities for acquisitions and exits still exist.

Key Fintech Trends

• AI Integration: AI is transforming fintech, making operations more efficient but also impacting job markets.
• Green Fintech: Sustainable fintech solutions are crucial for adhering to environmental goals.
• Embedded Finance: Open finance is becoming increasingly important.
• Valuation Adjustments: Fintech valuations have decreased, making funding more accessible but also more competitive.
• Mainstream Adoption: Fintech is becoming ubiquitous in everyday transactions, often without users realizing it.

Closing Thoughts

Excitement was expressed about the future of fintech, and eagerness was shown to learn from the upcoming speakers and panels. For those interested in joining Fintech Circle or seeking investment, the website was recommended. Applications are open until the end of August for the next round of investments. An invitation was extended to reach out via email for any questions. Appreciation was expressed for listening.