Overview
- KPMG’s Pulse of Fintech, published Aug. 24, shows UK fintech funding in the first half of 2026 fell to about $2.5 billion with 205 deals, the lowest totals since 2016.
- Independent trackers report smaller totals because they count different types of transactions, with Innovate Finance at roughly $1.8 billion and Tracxn at about $1.5 billion.
- Late-stage rounds drove most of the drop, with Tracxn reporting a roughly 45% fall in late-stage funding to $830 million while early-stage and seed activity held up better.
- AI-focused fintechs captured an outsized share of the smaller pool of capital, raising about $606 million across 79 deals and making up roughly 25% of UK fintech investment.
- The funding squeeze is pushing investors to be more selective, increasing interest from private equity and corporates in consolidation plays and forcing startups to prove unit economics to win funding.