September 26, 2023

Fintech loses UK funding crown as VCs bet on global green transition

Energy and transportation startups have raised the most so far in 2023

Image: Ilya Grigorik

The UK’s energy startup sector has raised the most VC cash in 2023, knocking fintech off the top spot it has held for a decade.

Startups in the energy sector have picked up $3bn so far this year, just shy of the $3.4bn they raised across the whole of 2022, according to data compiled by Dealroom and HSBC Innovation Banking. 

Transportation startups — many of which cross over into the energy sector — have also bagged $2.7bn this year, a figure that puts them on track for a record year. Healthtech, meanwhile, brought in $2.4bn.


As for fintech, the sector raised just $2.1bn in 2023, down from a high of $13.5bn in 2021. It is likely to end the year at its lowest level since 2018. 

Funding crunch, what funding crunch?

The performance of startups in the energy and transport sectors defies the wider funding crunch in the UK tech ecosystem. In 2023 so far, VCs have ploughed $13.6bn into UK startups across all sectors, less than half of the $29.5bn they invested last year. 

But nine-figure raises have rolled in for energy startups this year, as investors take the opportunity to cash in on the wider global green transition.

In September, Zenobe Energy — which operates battery storage facilities and electric vehicle (EV) charging points — raised £870m, in what was the UK’s biggest funding round of the year. 

Another EV charging point company, EVC, raised £165m in February, EV rental company Octopus Electric Vehicles raised £150m in June and wind farm servicing company Venterra raised £150m in August. 

Unsurprisingly, EV companies bumped up the numbers on the transportation sector, too, which has also seen autonomous vehicle scaleups Conigital and Oxa raise £400m and $140m, respectively. 

Flailing fintech

Since 2014, fintechs have been leading the pack when it comes to UK funding — often by some distance. As recently as last year, fintech raised $11.4bn, more than three times as much as its closest rival, the energy sector.

But rising interest rates and reduced consumer spending in the wake of the UK narrowly avoiding a recession in 2023 has seen VCs lose confidence in a sector that’s been the poster child of a rising UK tech scene over the past 10 years.

With the days of’s $1bn round in January 2022 long forgotten amid layoffs and valuations being slashed across the sector, loan provider Abound’s £250m and insurtech Accelerant’s $150m are fintech’s biggest raises of 2023.

Kai Nicol-Schwarz

Kai Nicol-Schwarz is a reporter at Sifted. He covers UK tech and healthtech, and can be found on X and LinkedIn