Mergers and acquisitions in the UK and Europe’s fintech industry have accelerated over the past year, with companies increasingly targeting acquisitive expansion as tough financing conditions impact investment-led growth plans.
According to the latest financial services report from White & Case, there were 70 M&A deals involving fintechs in the UK and Europe during the year to June 2025, a 50 per cent increase compared to the previous year.
The increase in M&A comes amid a dip in fundraising in the fintech sector. According to the report, UK fintech fundraising stood at $3 billion (£2.2 billion) during the year to June 2025, down from $7.9 billion (£5.8 billion) the previous year and $12.5 billion (£9.2 billion) the year before that.
Hyder Jumabhoy, partner at White & Case, said that consolidation activity had “more than compensated” for the drop in fundraising appetite, adding that “fintechs which embrace the drive for profitability will pull through to exit.”
According to the report, M&A activity is being driven by increasingly challenging fundraising conditions across both public and private markets, forcing companies to consider mergers and/or acquisitions as a route to growth.
The increase in dealmaking is also attributed to the growth and greater maturity of the sector, which leads to investors focusing more on profitability and attaining sustainable growth than on customer acquisition.
The biggest consumers of financial technology over the past year, according to the report, were traditional banks. White & Case cited direct equity investments, e.g. HSBC’s investment in Clearscore, and venture fund investments, such as Lloyds’ and Nationwide’s investment in Aveni.
Despite the dip in fundraising activity since the peak in 2021, the report also showed that the UK remained the top European destination for attracting growth capital. Looking forward, White & Case say that funding round activity is expected to continue, but that more M&A deals, including bolt-on acquisitions, are “inevitable”.
A couple of recent M&A deals from the UK’s booming fintech sector
At the end of last month, it was reported that global investment firm Carlyle Group had agreed to acquire London-based financial software provider intelliflo from asset manager Invesco, in a deal worth up to $200 million (approx. £148 million).
Founded in 2004, intelliflo develops software for financial planning and management, with the company’s products widely used across the financial advisory sector. Currently, the company’s platform supports more than 30,000 professionals across approximately 2,600 advisory firms.
Fernando Chueca, Managing Director in the CETP investment advisory team, said: “intelliflo is a mission-critical software provider to the UK’s wealth management ecosystem, with a deeply embedded and loyal customer base.”
In another fintech transaction announced last month, digital bank Starling secured its first acquisition in four years with a deal for London-based fintech Ember, the developer of a range of digital tax and accounting tools aimed at SME customers.
The deal will see Ember’s tax and bookkeeping software built into the Starling app and online banking platform. The acquisition comes as HMRC prepares to introduce Making Tax Digital in April 2026, which will require certain sole traders and SMEs to submit quarterly accounts through an approved software provider in addition to the traditional end-of-year self-assessment.
There are widespread concerns that many of the estimated 780,000 set to be impacted by the changes are not ready. The integration of Ember’s digital tools into the Starling app will make it easier for customers to comply with the incoming Making Tax Digital system.
Starling Group CFO Declan Ferguson commented: “We are a natural FinTech consolidator, so targeted acquisitions like Ember will form a key part of our strategy as we continue to develop Starling Bank in the UK and Engine by Starling overseas.”
“Just as Fleet Mortgages has flourished since we bought it in 2021, I’m confident that Ember’s best-in-class tools will become a fantastic addition to Starling Bank’s offering.”
Find out more about M&A trends in the UK’s financial services sector