UAE surpasses UK to become world's second-largest fintech market in H1 2025
A.SREENIVASA REDDY (ABU DHABI)The UAE has emerged as the second largest fintech investment market globally in the first half of 2025, overtaking the United Kingdom and trailing only the United States, according to data compiled by Innovate Finance.This notable shift was largely driven by a landmark $2 billion capital raised by Binance, which positioned the country ahead of more established fintech hubs such as London and Singapore.Global fintech investment stood at $24 billion across 2,597 deals in the first half of 2025, marking a 6% increase from the previous six-month period. Of this, the UAE accounted for $2.2 billion from just 58 deals, highlighting its strategic appeal for high-value fundraising.This compares to the UK's $1.5 billion over 240 deals and India's $1.4 billion from 109 transactions. Singapore, another leading Asian fintech hub, drew $797 million across 100 deals.The US, as top country for fintech investment, attracted $11.5 billion in 1,082 deals.France and Germany, traditionally strong European players, attracted $693 million and $668 million respectively. Canada followed with $543 million, while Ireland secured $354 million in funding. Brazil rounded out the top 10 with $350 million across 53 deals.Binance's $2 billion capital raise in the UAE was the largest fintech transaction globally during the first half of 2025.MGX, the Abu Dhabi government-backed investor focused on AI and advanced technologies, made the landmark investment in the world's largest cryptocurrency exchange to accelerate digital asset adoption. The deal, which was settled in stablecoins, eclipsed all other major fundraises and underscored the region's growing influence in the digital assets space. Other top global fintech deals included Plaid's $575 million raise in the US (open banking), Rapyd's $300 million in the UK (payments infrastructure), Airwallex's $300 million in Singapore (cross-border payments), and Mercury's $300 million in the US (neobanking).Commenting on the broader trends, Kaan Akin, Chief Investment Officer at Tenity, noted: 'We're not in a hype cycle – we're in a recalibration. Investors are moving away from broad bets and looking for sharper execution, deeper tech, and clear paths to revenue.'While global fintech investments are stabilising, the competition for capital is intensifying. The UK retained its crown as Europe's fintech leader, but the gap with the rest of the continent has narrowed. Europe (excluding the UK) raised $2.9 billion in H1 2025 – a 28% increase from H2 2024. France and Germany were key contributors, underlining strong regional momentum.Innovate Finance CEO Janine Hirt said the figures demonstrate resilience in the face of global headwinds. 'Despite the broader market adjustment, it is encouraging to see signs of stabilisation and resilience, in the UK and across Europe. The UK FinTech sector has proven its value. It is profitable, job-creating and globally recognised."To retain our global lead however we need to continue working with industry, government and regulators to improve access to growth capital and innovation.'Analysts pointed to a shift in investor behaviour, with capital becoming increasingly concentrated among top-tier funds.Rezso Szabo, Head of London at Illuminate Financial, said: 'In H1, we continued to see a bifurcated venture and early growth market... Yet another bifurcation is emerging: capital allocation is increasingly concentrated among top-tier funds and those emerging managers who have delivered meaningful exits.'
With the IPO market showing signs of revival and the venture ecosystem recalibrating, secondary market deals are also gaining traction. Kristaps Ronis of Ion Pacific expects global VC secondary transaction volume to reach a record $122 billion in 2025, as funds seek liquidity and exit opportunities.
Source: Aletihad - Abu Dhabi
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