UK fintech investment fell sharply in the first half of 2026 even as money flowing into the sector globally more than doubled, widening the gap between Britain’s performance and the broader funding market.
KPMG‘s latest Pulse of Fintech data put UK investment at £1.8 billion across 205 M&A, private equity and venture capital deals during the first six months of the year. Investment was down nearly two-thirds year over year, while the comparable deal count fell from 281.
The £1.8 billion figure is KPMG’s measure, based on PitchBook data and its definitions of fintech transactions. Other trackers have produced different totals for the same period, making the methodology important when comparing UK funding estimates.
KPMG described the H1 result as the lowest since 2016, when it published its first Pulse of Fintech report, rather than making a broader historical claim about UK fintech investment.
UK Fintech Moved Against the Global Market
The more striking number sits outside Britain.
Global fintech investment reached £75.8 billion in H1 2026, compared with £37.1 billion in the same period last year, according to KPMG’s data. In other words, worldwide investment roughly doubled while UK investment contracted by close to two-thirds.
That divergence makes the UK numbers more than another funding-downturn story. Capital has not simply disappeared from fintech globally. It has become more concentrated in other markets, larger transactions and themes investors are currently willing to fund.
Britain still held the top position for fintech investment across Europe, the Middle East and Africa, but its share of EMEA funding fell to 22% in H1 2026 from 68% at the end of 2025.
The UK nevertheless remained second only to the US by deal activity and recorded more transactions than the rest of Europe combined, according to KPMG’s latest figures.
That leaves Britain with a large fintech ecosystem but a much smaller share of the capital being deployed into it.
AI Was the One UK Funding Line That Grew
Artificial intelligence was the clearest exception to the broader contraction.
AI-related UK fintech companies attracted £445 million across 79 deals, equal to 25% of total UK fintech investment during the half. A year earlier, AI-related fintech investment was £382 million across 67 transactions and represented 16% of the UK total.
The increase is important because it shows that investors have not withdrawn from every part of UK fintech equally.
KPMG UK fintech head Hannah Dobson described the first half as challenging but pointed to AI as an area where investment demand continued even as the broader market weakened. KPMG had already identified AI as one of the dominant investment themes heading into 2026, particularly where financial-sector applications could show proprietary technology and clear commercial value.
The result is a much more selective UK funding market. Fintech as a category captured considerably less capital, but companies that could attach themselves to the AI investment cycle continued to attract money.
That is the main contrast in KPMG’s first-half numbers: £1.8 billion for UK fintech while the global market expanded to £75.8 billion. Britain remains a major fintech hub by deal activity, but in the first half of 2026 it captured a far smaller piece of a rapidly expanding global pool.
