Fintech SMEs in the City of London have secured £4.3billion in equity investment since 2019, making the sector the most dominant in the Square Mile’s thriving tech ecosystem, according to a new report from the City of London Corporation.
The Tech SME Landscape report highlights the continued expansion of fintech firms in the City, with 497 fintech SMEs accounting for 17.6 per cent of all tech companies based in the area – more than any other sector, including data and AI.
After a decline in 2023, fintech investment in the City saw a strong rebound in 2024, setting the stage for continued growth this year. In the first three quarters of 2024, fintech firms raised £810million across 69 deals, more than doubling the £354million raised in 2023.
While the number of deals declined compared to previous years, the average investment size increased, suggesting a shift towards larger funding rounds and growing investor confidence.
The City as a fintech hub
The City of London remains a key hub for financial technology innovation, benefiting from its proximity to major financial institutions, investors and accelerators. The Square Mile is home to 14.5 per cent of all fintech SMEs in London, the highest concentration of any UK local authority.
Prominent fintech firms based in the City include Teya (formerly SaltPay), a payment processing company that has raised £358million in equity since 2019, achieving unicorn status by 2021. The report also highlights the role of fintech-focused accelerators such as the Fintech Innovation Lab London, which helps early-stage companies refine their business models and attract investment.
Nine out of 11 of its billion-dollar tech companies operating in financial technology. These firms have collectively raised £6.7billion in equity since 2019. Among them is Monzo, which recently increased its valuation to $5.9billion (£4.6billion) ahead of a planned EU expansion.
“As the UK’s leading tech hub, London provides unparalleled advantages in terms of networking, talent acquisition and funding, making it a magnet for both startups and scale-ups,” said Chris Hayward, policy chairman of the City of London Corporation. “London’s tech sector is globally recognised, ranking first in Europe and fourth worldwide for venture capital investment. This vibrant investment landscape is supported by a steady influx of skilled talent, with top academic institutions contributing to a pipeline of tech-focused graduates.”
But he warned that while such talent pipelines ensure London remains at the forefront of emerging tech trends, the city mustn’t rest on its laurels.
“But we mustn’t be complacent,” Hayward also said. “To support the tech sector to thrive in the Square Mile, we need to do all we can to encourage growth – a sentiment underpinning the City of London Corporation’s SME Strategy.”
SME Gateway
In the next fortnight, the City of London Corporation prepares to soft launch the SME Gateway, an online portal to provide better information to SMEs about how the City Corporation offers to help them set up in the City and access private finance needed to scale up. It will become a key portal to attract, support and maintain relationships with startups and SMEs.
The City of London Corporation will launch SME Gateway on 20 February, hosting an event titled Access to Finance for SMEs: Empowering Growth Through Funding and Innovation in partnership with British Business Bank, Company of Entrepreneurs and the Federation of Small Businesses.
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