The UK is losing its crown as Europe’s fintech capital
Key Points
- UK fintech investment fell to £1.80 billion in H1 2026, down two-thirds year on year.
- The UK's share of EMEA fintech investment dropped from 68% to 22%.
- Deal count hit a decade low of 205, still second only to the US globally.
- AI-related fintech took £445 million, a quarter of the UK total.
- Cybersecurity fintech funding rose from £40,000 to £90 million, first in Europe.
The UK’s share of fintech investment across Europe, the Middle East and Africa fell from 68% at the end of 2025 to 22% in the first half of 2026, according to KPMG’s latest Pulse of Fintech report.
Total UK fintech investment reached £1.80 billion in the first six months of the year, down roughly two-thirds from £5.00 billion in the same period of 2025.
That is the lowest figure since 2016, when the report began and investment stood at £735 million, and puts 2026 on a par with 2020 and the first wave of Covid.
The UK still holds the top spot in Europe and across EMEA, but its lead has narrowed sharply.
Deal count fell to a decade low, with 205 UK fintech deals completed across mergers and acquisitions, private equity and venture capital, down from 281 a year earlier. The UK nonetheless sits second only to the US globally on deal activity, and completed more deals than every other European country combined.
The three largest UK deals were Ebury’s £543 million private equity investment, Paymentology’s £129 million private equity investment, and a £124 million fundraising round for 9fin. Geographic expansion drove the first two.
AI took a growing slice of a shrinking pot. AI-related UK fintech investment hit £445 million across 79 deals, or 25% of the UK total, against £382 million across 67 deals and 16% of the total a year earlier.
The UK leads Europe on AI-related fintech investment, ahead of France at £244 million and Germany at £134 million.
Cybersecurity fintech investment climbed from £40,000 across three deals to £90 million across seven, moving the UK from fourth to first in Europe and displacing Germany at the top. Notably, cybersecurity still accounts for just 5% of UK fintech investment.
“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,” said Hannah Dobson, Head of Fintech at KPMG UK.
“Investors are continuing to back areas where they see long-term structural growth, even as capital deployment becomes more selective,” she added. “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.”
The global picture
Global fintech investment rose to £75.80 billion in the first half of 2026, up from £53.10 billion in the second half of 2025 and £37.1 billion a year earlier.
Global deal volume fell from 2,501 to 2,100 over the same period.
The Americas took more than 80% of global fintech investment at £63.80 billion across 1,120 deals, with the US alone accounting for £59.40 billion across 933 deals.
EMEA drew £8.30 billion across 626 deals, putting the region on pace for a decade low on both volume and value after a 2025 that saw £29.00 billion across 1,714 deals. Investment in the Asia-Pacific region fell from £5.20 billion to £3.40 billion.
Payments led all sectors globally with £32.50 billion, well above the 2025 annual total, on the back of several very large deals. AI-focused fintechs attracted £15.70 billion.
“While much of today’s investment is focused on the largest and highest-quality deals, the broader fintech market is gaining momentum,” said Karim Haji, UK and global head of financial services at KPMG.
