The smaller UK fintech companies are facing funding complexities. Nearly three-quarter of smaller fintech companies have a cash runway of half a year. It is found that approximately 70 percent of smaller UK fintech companies have a six months or less.
While most of them are worried about their next round of funding, a few are considering to diversify their revenue and one-tenth plan to wind up their business.
Charlotte Crosswell, CEO of Innovate Finance, told the media, “It’s evident that the fintech sector faces a significant funding gap as a direct result of Covid-19. We need to act fast before it’s too late. If we fail to address this, we risk losing many companies in the fastest-growing sector in the UK economy. We cannot turn our backs on the start-ups now or we will pay the price later down the line.”
Although fintech is emerging in the UK, crisis such as the coronavirus pandemic and Brexit is affecting the industry’s growth rate. Previously, the startup economy in the country was flourishing with investors seeking to invest their money in new projects. In fact, investors in the industry last year was almost doubling on top of levels recorded in the second half of 2018, media reports said.