Influenced by digital transformation, the fintech landscape is witnessing rapid growth. With the evolution of technologies, brand new solutions are being widely introduced in the sector, including neobanks, online brokerage services, and wealth management software.
Striving to digitize business processes, improve customer satisfaction, and reduce commissions, fintech startups enter and penetrate global markets. The United Kingdom is a center for many financial companies that aim to bring innovation to life, saving the time of users and increasing efficiency.
In this article, Surf experts will talk about leading UK fintech startups of 2021, so that you can get ideas for implementing in your own project. This post also considers how COVID-19 affected the industry, as well as highlights statistics regarding top UK fintechs and investments.
European fintech startup landscape in 2021
Analysts at deVere Group state that the use of fintech apps in Europe has increased by 72% during the coronavirus outbreak. Since the adoption of financial technology solutions had been experiencing sustainable growth even before COVID-19, this trend is expected to stay after the pandemic ends. According to research by Adjust and Apptopia, activity in investment applications rose worldwide, with an 88% surge in average daily sessions in the first half of 2020. Additionally, the number of sessions in payment apps jumped by 49%.
Recognizing the opportunity to catch a wave and generate profit, venture capital firms, entrepreneurs, and others invest heavily in fintech startups. Crunchbase says that a record number of European fintech firms became unicorns in 2021, with 19 new startups (for example, Starling Bank, Pleo, Trade Republic) joining the board.
To date, financial technology unicorns managed to collectively attract $22.6 billion, while $11.5 billion of this capital was raised this year alone. Altogether, the value of those fintech startups accounted for $178 billion.
London ranks second in the worldwide fintech ecosystem. Nearly 75% of all UK fintechs are headquartered in this city, as reported by Deloitte. Furthermore, London has the maximum concentration of financial services companies across the globe. In 2020, London-based startups attracted 94%—which is $4.1 billion—of the total UK’s fintech venture capital.
It is worth noting that the annualized growth rate of UK fintechs is 16% compared to a 1.3% SME increase over the past years.
Now, let’s take a look at the list of UK fintech companies that dominate the market, bringing innovation to transform the customer experience, increase efficiency, and save costs.
UK fintech startups that take the center stage in 2021
Headquartered in London, Revolut is the world’s leading neobank that was started by entrepreneurs from Russia and Ukraine. Established in 2015, this UK fintech startup delivers services such as mobile banking, online payments, money transfers, foreign currency/cryptocurrency exchange, and commission-free stock trading.
Revolut has a mobile application that supports online spending and ATM withdrawal in 120 currencies and money remittances in 29 currencies. This smartphone solution provides access to plenty of cryptocurrencies, involving Bitcoin, Litecoin, and Ethereum.
Distinctive features of Revolut include multi-currency cards that reduce commission fees charged for making international payments, access to stock trading, and the possibility of exchanging cryptocurrencies.
Serving the needs of both private individuals and corporate clients, Revolut offers a free plan to use basic system functionality. To date, the company has raised $1.7 billion over 16 rounds. In July 2021, Revolut was valued at $33 billion, thus becoming the most valuable UK fintech startup in history. At the moment of writing, the neobank has 15 million customers and 0.5 million business customers while being available in more than 35 countries.
Monzo is a UK online bank startup that provides consumers with access to a wide range of finance products and services. Founded in 2015, the organization serves either private individuals or businesses, helping them plan their budgets, control spending, get interests, and receive loans while ensuring the visibility of financial data.
Operating via a fintech mobile application, Monzo allows enterprises to generate, send, and track invoices, as well as manage accounting operations.
In September 2021, Monzo became the first bank that launched its own “Buy now, pay later” (BNPL) service, named Flex. As of 2020, Monzo had more than 4 million customers while the total value of transactions accounted for $1.38 billion. By now, Monzo has raised a capital of $648.1 million over 20 rounds.
Moneybox was founded in 2015 to help consumers invest in their future. Based in London, this UK fintech startup provides a mobile application, which can be downloaded from the App Store or Google Play. Moneybox also allows retirees to track down their old workplace pensions in personal accounts. Additionally, the solution enables users to monitor the performance of their pension investments.
With user growth of 121% from year to year, the company states that today it is increasing faster than other key players in UK wealth management. With a team of 120 employees, Moneybox has a community of more than 450,000 clients. To date, the UK-based fintech startup has already raised a capital of $76.7 million over 10 rounds.
Headquartered in London, eToro is among UK fintech startups that drive innovation. Launched in 2007, eToro is the globally leading social trading and online brokerage platform that allows users to invest in stocks, commodities, cryptocurrencies, exchange-traded funds (ETFs), and other assets. Furthermore, eToro enables customers to replicate portfolios of the most successful network members.
Thanks to the system, people can buy cryptocurrencies such as Bitcoin and Ethereum without deposit fees. Employing artificial intelligence (AI), eToro automates financial processes while transforming the user experience. At the moment, the system has more than 17 million users in 140 countries. Crunchbase reports that eToro managed to attract $272.7 million so far.
Headquartered in Shoreditch, Wise, formerly TransferWise, is one of the top UK fintechs that was originally started as a money transfer service. Established in 2011, this financial technology startup grew to a cross-border payment network, aiming to improve customer experience and make international banking more affordable.
Coming up with no hidden fees, Wise allows users to carry out transactions, receive payments in ten different currencies, as well as hold and convert 54 currencies. Using the application, people can send money to 80 countries at a low commission. In addition, Wise provides a debit card that lets users spend or withdraw money in over 200 countries. Recently valued at $5 billion, the company has already raised $1.3 billion over 13 rounds.
PaymentSense is among the main UK fintech startups in the country. Founded in 2009, the company allows merchants to accept card payments either in person (using portable, mobile, or countertop machines) or remotely (online via a website, over the phone, or by email) while quoting businesses based on their needs. The company provides a fintech mobile application that allows users to view transactions in real time, involving net and gross spending.
With a software product, it is also possible to view bills, track account activity, and export data for accounting management. Delivering services to small and medium-sized enterprises (SMEs)—for example, coffee shops, restaurants, bakeries—PaymentSense offers low-cost card processing solutions. As of today, a financial technology startup serves more than 70,000 SMEs while handling over 250 million transactions annually.
7. Starling Bank
Established in 2014, Starling Bank is a fully licensed and regulated UK online bank startup that offers a range of services through its Banking-as-a-Service model. Coming up with a mobile banking platform, the neobank enables users to create personal, business, and joint accounts alongside a child card.
A fintech mobile app includes multiple features such as payment notifications, flexible overdraft, and customer support 24/7. Employing a smartphone solution, users can carry out transactions and monitor their spending habits. With Starling Marketplace, consumers get access to a variety of products and services from third-party vendors.
At the moment, Starling Bank is the fastest-growing startup of this kind for small and medium-sized enterprises in Europe, holding a 6% share of the UK’s SME banking market. The platform has 2.1 million accounts, with 374,000 business accounts among them.
Recently, Starling reported a revenue increase of virtually 600% during the 16 months to the end of March 2021. By now, the neobank has raised a capital of $922 million over 10 rounds.
Founded in 2020, Primer is one of the youngest UK fintech startups that gained recognition. Headquartered in London, Primer was started by Paul Anthony and Gabriel Le Roux, former employees of PayPal. A financial technology company provides a third-party app framework that allows engineers to integrate payments on mobile and web devices for delivering a seamless online shopping experience.
Utilizing Primer, merchants can implement numerous payment options—involving buy now pay later —much faster. Enterprises can also connect other payment-related services to their workflows without development effort while ensuring protection against fraud.
It is worth remarking that Primer is the first open framework serving such goals. Currently, this UK-based fintech startup is valued at $425 million. Crunchbase reports that Primer has already raised $73.4 million over 4 rounds.
Nutmeg is among the top UK fintechs delivering online investment portfolio management services. Established in 2012, the company provides a robo-advisor—one of the largest in the United Kingdom—to automatically invest customer funds in listed securities, commodities, ETFs, and other assets. Available on iOS and Android, Nutmeg’s mobile app allows users to open ISAs, pension, and general investment accounts.
Analyzing client goals and investor profiles, the platform acts as an alternative to stockbroker solutions, where members take decisions on their own. With the view of expanding its influence in the UK, JP Morgan has acquired Nutmeg fintech startup. The deal value is estimated at £500–700 million. Currently, the system has over 150,000 customers.
Launched in 2014, Soldo is one of the leading UK fintech startups. Headquartered in London, Soldo has offices in Milan, Rome, and Dublin. The company delivers financial services to small and medium-sized enterprises, as well as multinational corporations in 30+ countries.
Soldo provides a software platform combining prepaid Mastercard cards with comprehensive management software. Using the system, businesses can track and control spending while achieving real-time visibility of transactions across all departments.
With a fintech mobile app, customers can check out their balance, transfer money to payment cards, and receive notifications. It is also possible to connect cards to a smartphone application and an administrative web console.
As of today, Soldo serves more than 26,000 organizations, including Mercedes Benz, Gymshark, Brooks Running, and GetYourGuide. To date, a financial technology startup has fundraised $263.2 million over 7 rounds.
Wrapping it up
When figuring out how to launch a fintech startup, it is important to do market research, analyze competitors, and identify the audience’s pain points. This will help you find inspiring fintech startup ideas for your project.
You should also take into account the latest industry trends to discover how to gain a competitive edge, as well as the principal challenges that have to be addressed, from achieving data security to choosing a business model.
Since the finance and banking industry is seeing rapid transformation towards digitization, there are many opportunities to add value to customers through innovation, filling a niche and generating profit. Explore how to start a fintech startup in 5 steps.
If you aim to build a fintech app, feel free to contact our team and we will get back to you shortly. Having solid experience in fintech software development, our engineers create software solutions while ensuring compliance with the required regulations.
To learn more about our expertise, check out our featured projects that involve a Zenit mobile bank, a smartphone banking solution, and the first banking app in Europe written with Flutter.