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Fintechs Could Lose £1bn Worth Of Investment As A Result Of Covid-19

Posted 17 days ago

Fintechs Could Lose £1bn Worth Of Investment As A Result Of Covid-19
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Research from TechUK and Qadre has revealed that 68 percent of Fintech founders have reported missing out on crucial funding rounds as a result of coronavirus. The report ‘Making Fintech work for Fintechs’ is based on a survey of 59 UK Fintech founders and exposes the impact of COVID-19 on fundraising.

The UK is one of the world’s most successful Fintech markets, notching up $4.9 billion of capital raised in 2019 (Innovate Finance, 2020). This surpasses 2018’s figure of $3.6 billion as the UK moved up to second in the global rankings for VC investment into Fintech.

The average amount lost by Fintech businesses to date is approximately £1.2m. As the UK is home to over 1,600 Fintech companies, it means an estimated £1.9bn of investment has been lost across the industry because of the crisis. With a huge economic toll on the sector expected, Fintech founders want to simplify equity management processes to help them better manage their business.

“The UK has one of the world’s most successful Fintech markets, but company founders are facing unprecedented economic headwinds with COVID-19 at the eye of the storm,” said Nick Williamson, CEO of Qadre.

“At this time of uncertainty, equity management processes are preventing Fintechs from raising money, delivering new services, and growing their business. Equity management isn’t just inconvenient, it is damaging UK Fintech.

It has never been more important for Fintechs to streamline unnecessary tasks and focus on developing products and services that can help them ride out this storm.”

“At the heart of the Fintech industry is the promise of innovation to create financial services that eliminate complexity, provide an intuitive user experience, and create value for consumers and businesses alike.

This report highlights that there is space to replicate this in equity management,” said Julian David, CEO of techUK.

“Fintech organisations must address the need to better support the start-up community to improve efficiency and generate company growth. The dearth of solutions that address equity management is often overlooked. This study reveals the impact it can have on wider company success.”

Author: Sacha Bright & Oliver Murphy

Disclaimer

To the best of our knowledge, the information we have provided is correct at the time of publishing. Sacha Bright is not a solicitor or accountant and we recommend that you seek professional advice on any topic discussed.


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Tagged: News Fintech Covid-19



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