- The UK retains European top spot but is losing market share
- AI-related fintech gains ground despite wider funding slowdown
Total UK fintech investment hit £1.8bn in the first half of 2026, down around 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 fintech deals across mergers & acquisitions (M&A), private equity (PE) and venture capital (VC) 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*.
The UK's largest deals in H1’26 were:
- Ebury’s £543m PE investment, predicated on potential for geographic expansion
- Paymentology’s £129m PE investment also primarily focused on geographic expansion
- 9fin’s £124m fundraising round
AI-related fintech funding gains ground despite wider slowdown
AI-related UK fintech investment** reached £445m across 79 deals in H1'26 making up 25% of total UK fintech investment. By comparison, the first six months of 2025 saw £382m invested across 67 deals, comprising 16% of all fintech investment. The UK continues to lead Europe for AI-related fintech investment, ahead of France at £244m and Germany at £134m.
Cybersecurity sees growth but still accounts for just 5% of total investment
In H1’26, cybersecurity-related UK fintech investment** rose to £90m across seven deals from £0.04 million across three deals in H1’25. While it represented just 5% of UK fintech investment, the market climbed from fourth to first position within Europe year-on-year. UK cybersecurity fintechs attracted more funding than fintechs in any other European country, knocking Germany off the top spot.
Hannah Dobson, Head of Fintech, Partner, KPMG 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.”
2026 Global Highlights:
- Global fintech investment has grown considerably over the past three six-month periods, rising from £37.1 billion in H1’25 to £53.1 billion in H2’25 to £75.8 billion in H1’26.
- Global deal volume fell from 2,501 deals in H2’25 to 2,100 in H1’26; this remains below historic norms, reflecting continued investor selectivity despite higher capital deployment.
- The Americas attracted over 80 percent of global fintech investment in H1’26 (£63.8 billion across 1,120 deals), of which the US accounted for £59.4 billion across 933 deals.
- Coming off a strong 2025 that saw £29.0 billion invested across 1,714 deals, the EMEA region saw £8.3 billion invested across 626 deals in H1’26 – on pace for a decade-low for both deal volume and value.
- Fintech investment in the ASPAC region remained muted, declining from £5.2 billion across 426 deals during H2’25 to £3.4 billion across 350 deals in H1’26.
- Global fintech M&A activity strengthened, with deal value increasing from £27.3 billion across 514 deals in H2’25 to £49.9 billion across 394 deals in H1’26
- Venture capital investment remained strong across the global fintech sector, led by the US which saw £12.3 billion in VC investment.
- At the sector level, payments led the way, attracting £32.5 billion in H1’26: well over 2025’s annual total, as a result of several large megadeals.
- AI-focused fintechs attracted £15.7 billion across VC, PE, and M&A.
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.”
