German fintech startups raised 80% more than British ones in the second quarter

Germany overtook Britain as the fintech funding capital of Europe in the second quarter of the year, with German startups pulling in $186 million (£142 million) compared to $103 million for British businesses.

The UK total was a decline on the $117 million raised in the first quarter, new figures from KPMG and CB Insights show. That's not as bad as many feared given Brexit. BI has already highlighted the fact that fintech - financial technology -investment in the UK held steady in July.

However, it's still the lowest funding figure in 5 quarters and almost a quarter of what startups raised in the second quarter of last year:

The three largest fintech funding deals in Europe in the second quarter were all in Germany: marketplace lender Finanzcheck raised $46 million; digital-only bank N26 raised $40 million; and payment provider AEVI raised $34 million.

KPMG and CB Insights say the findings "suggests Germany as a whole is well positioned to attract fintech investors that may be hesitant to invest in the UK post-Brexit."

But the report adds: "Regardless of Brexit, the UK will not give up its role as Europe's fintech leader easily, demonstrated by the country's regulatory sandbox and its recent announcement of a fintech bridge with Singapore aimed at making it easier for UK-based fintech companies to operate in that country and vice versa.

"This highlights that the UK intends to continue to foster its strong fintech ecosystem. Leaving the EU may even give it more flexibility to offer fintech incentives."

Globally, KPMG and CB Insight's "Pulse of Fintech, Q2 2016" report found fintech funding hit $9.4 billion, boosted by Ant Financial's bumper $4.5 billion injection in China. Funding to VC-backed fintech firms fell by 49%.