Pulse of Fintech – UK perspective

Total UK fintech investment hit £1.8bn in the first half of 2026, down two-thirds from £5.0bn in the same period in 2025 according to KPMG’s latest Pulse of Fintech report.

This marks the lowest level of UK fintech investment since 2016 (£735m), when the report began and puts this year on a par with 2020 when Covid took hold.

While the UK retains the top spot for fintech investment in Europe, and indeed EMEA, its dominance has waned. The UK accounted for 22% of all EMEA investment in H1'26 versus 68% at the end of 2025.

Deal count also fell to its lowest in a decade, with 205 UK M&A, PE and VC fintech deals completed in H1’26, down from 281 year-on-year. Yet, when it comes to deal activity, the UK still sits second only to the US globally and exceeds all other European countries combined^*.

Hannah Dobson, Head of Fintech, Partner, KPMG in the UK, said:

"It has been a challenging start to 2026, with levels of investment on a par with those seen during the first wave of the pandemic. That said, there are pockets of significant demand, particularly in AI, where investment is gaining prominence even as the wider market has softened.

“Investors are continuing to back areas where they see long-term structural growth, even as capital deployment becomes more selective. Cybersecurity investment also increased year-on-year, with a clear overlap with AI as the whole sector navigates the age of frontier AI models and the opportunities and threats these create for businesses.

“While there are bright spots, the geopolitical and economic headwinds facing firms only stand to intensify as the year continues and the second half of the year is likely to remain challenging for fundraising.”

Karim Haji, UK and Global Head of Financial Services, KPMG, adds:

“While much of today's investment is focused on the largest and highest-quality deals, the broader fintech market is gaining momentum. AI is driving new opportunities, corporates are becoming more active, and private equity is looking at consolidation plays. Even smaller startups are attracting attention when they bring something truly differentiated to the table. Together, these trends point to a positive long-term outlook for the fintech sector.”