UK fintech funding hits 10-year low in H1 2026

UK fintech investment fell two-thirds to £1.8bn in the first half of 2026, the lowest six-month total since the survey began in 2016. Deal count in the period was 205, down from 281 in the same period of 2025.

KPMG’s Pulse of Fintech report shows the £1.8bn total compares with £5bn in H1 2025 and with £735m in H1 2016. The UK accounted for 22% of fintech investment in the EMEA region in H1 2026, down from 68% at the end of 2025.

Data from Tracxn Technologies indicates London received about 94% of the UK’s fintech investment in the first half of 2026. The recorded number of deals in the UK was 205 in H1 2026 versus 281 in H1 2025.

Investment in fintech companies tied to artificial intelligence reached £445m across 79 deals in H1 2026, up from £382m in 67 deals a year earlier. AI-linked investment accounted for roughly a quarter of the UK total for the period. Cyber security-related fintech funding rose to £90m from £40,000 in the same period a year earlier, and the UK received more cyber-related fintech funding than Germany in H1 2026.

Hannah Dobson, head of fintech at KPMG UK, warned: “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.” She added that investors were focusing on areas with long-term structural growth and that AI and cyber security were overlapping as companies address risks from advanced AI models.

Globally, the Americas drew the majority of fintech capital. KPMG reported £63.8bn invested across 1,120 deals in the region, with the US accounting for £59.4bn and 933 of those deals.

Karim Haji, UK and global head of financial services at KPMG, highlighted longer-term trends: “AI is driving new opportunities, corporates are becoming more active and private equity is looking at consolidation plays.” He noted that smaller startups offering differentiated products continued to attract investor interest.

KPMG and market analysts expect fundraising conditions to remain tight through the second half of 2026 and noted that capital-intensive firms and companies targeting rapid scale are likely to face the greatest pressure.