October 5, 2023

An in-depth look at the fintech market today

Photo by Aaron Gilmore on Unsplash

An in-depth look at the fintech market today: why B2B is having its moment, and the rise in international expansion into the Middle East and North Africa region.

It’s no surprise that the UK fintech market has dealt with incredibly tough challenges over the past year as businesses scale back and cut costs. With the current rise in inflation, increase in interest rates and geo-political tensions occurring, it has not been an easy ride for founders. On top of that, reports of a looming short-lived, mild recession is said to be taking place at the end of 2023.

As a result, the market is experiencing an investment drought and drop in revenue due to a lack of disposable income from customers, therefore creating hurdles for businesses who had their sights set on growth.

Shifting challenges into opportunity

However, on a brighter note, these market conditions have also created great opportunities for businesses willing to see it through.

If we take a look back at the UK fintech market in 2020, saturation was becoming an issue. The pandemic and ensuing investment drought forced us all to see and celebrate a different type of success story – those who had tightened up their strategies and struck whilst the timing was right.

Businesses realised that they had to take a hard look at their finances, carefully calculating the return on the cash they were funnelling in and honestly asking themselves if the money was really supporting sustainable growth and translating into recurring revenue. As Sifted stated in their recent fintech report: “The old VC model – losing money for years to acquire new customers — is not a winning pitch right now. No surprise considering where we are in the fintech investment cycle. For most, the focus is on survival in the immediate future and a faster path to profitability.” 

To add to that, with customers becoming more apprehensive about where they are spending their money, those managing the product roadmap are forced to take a look into what is actually adding value to a customer’s life and/or business plans.

Although there was a short economic breather for businesses between the pandemic and today, those who are able to create purposeful products and services with a tighter budget now and in the future, will be on the road to sustainable growth. They will then emerge as one of the many new sets of fintech winners (alongside those who continue to thrive) over the next 12 months.

Overall, this has manifested into smarter, more useful products and services on the market, and has taken the pressure off, and eliminated the ego around aggressive growth. Plus, it has led to fintechs sourcing new ways to create revenue and investment opportunities whilst recession-proofing the business for future financial events.

Two specific avenues that have been explored to do just that – exploration into the Middle East and North Africa region and B2B fintech solutions.

B2B solutions – a recession-proof fintech subsect 

Many recent reports have come out stating the case for B2B solutions. Although we may be biassed at Manigo, B2B solutions have consistently remained recession-proof. Why? With a lower acquisition cost versus B2C products and services, a proven source for recurring revenue streams and partnerships built off of trusting relationships, the sector remains popular for investors even through times of financial doubt and strain.

Sifted boldly stated that “B2B is the place to be” with the big unmet needs in fintech all lying in B2B use cases. Business Insider also agrees that the B2B area is grabbing much-deserved VC attention in recent months.

Finch Capital’s very informative report on the State of European Fintech in 2023, with its very telling subtitle that sums up the year perfectly: the return of funding discipline triggered the ecosystem to fight for profitability to survive, also showed that investor interest lies in B2B fintech solutions. As payment and open banking consolidate, regulation technology is driving increased enthusiasm in the subsector.

At Manigo, we have personally seen the interest in B2B rising over the years as many businesses look to amp up their own offerings (even those outside of fintech) based on continuing consumer demand for fully rounded services and the need for a seamless customer experience – a simple and smooth transition from selection to purchase. As of now, we see no sign of this ‘need’ for B2B fintech services slowing down.

International expansion

Over the past few years, the Department of International Trade, amongst many other organisations, including London and Partner’s Grow London initiative, supported by the Mayor of London (of which Manigo is a part of this year’s cohort), has really encouraged collaboration with other fintech growth hubs around the world, and it has worked.

In 2019 and 2020, the spotlight shone bright on Hong Kong, Singapore and many parts of Europe, all with varying degrees of success.

More notably, and albeit quietly until recent months, the Middle East and North Africa (MENA) began the promotion of its fintech community, allowing it to grow at an exponential rate which hasn’t gone unnoticed by the rest of the world. Since the return of more freedom and travel in 2021, many UK fintechs have set their sights on the region which has seen a huge surge in fintech-interest over the past three years.

The fintech landscape in the Middle East and North Africa (MENA) region

Although comparatively smaller in land size, the UK is still considered a central hub for fintech investment and innovation. The UK has held a position within the top three destinations for fintech over the past years and continues to be a huge contributor to the country’s GDP.

As UK fintech investment dropped to $5.9 billion in H1 2023 (down 57% in a year) from $13.8 billion in the same period in 2022, deals also decreased from $63.2 billion across 2,885 deals in H2’22 to $52.4 billion across 2,153 deals in H1’23. Despite this drop the UK continues to hold second place in the global ranking, with the US ahead of it and outpacing India (which remains in third place).

There are many reasons that have directly or indirectly impacted the UK, which was mentioned at the start of this blog. More anecdotally, although fintechs have done their very best to remain optimistic and positive, the feeling of concern around revenue and investment is palpable. This has been voiced at events, through public and private conversations and can even be sensed through the way decisions around roadmaps, partnerships and strategies are being played out.

Compare this to the MENA region, which according to sources feel similarly, yet have not felt the actual weight of the situation impact the region’s promise: “The economic impact of the pandemic and the tightening of monetary policy to push down inflation is just one of many challenges faced by the financial services industry in the Middle East. Despite this, the industry remains just as strong as it was pre-pandemic.”

According to the International Monetary Fund (IMF), venture funding in the Middle East and North Africa (MENA) region rose to $925 million from $587 million in 2021 – an increase of 58%. The funding in 2022 was across 131 deals compared with 124 deals in 2021 showing that funding rounds are becoming bigger.

Although we are looking at smaller numbers, the fintech community is relatively young and yet are making huge strides within such a short period of time. Research from MAGNiTT found that fintech startups in the MENA region recorded a 183% year-over-year growth in funding in 2021, the highest yearly growth rate over the past five years. Today, the region is home to over 800 fintech startups with a net worth of $15.5 billion with the majority emerging from the United Arab Emirates (UAE). Research from Saudi Arabian technology venture capital fund predicts that MENA will see 45 unicorns worth over $100 billion by 2030.

The region is determined to shed any previous reputational doubt through new inclusive initiatives and by strongly positioning themselves as very much ‘open to business’ by showcasing the community’s readiness to harmonise between both the business and personal cultural norms of the east and the west.

Through our own experience, when Manigo attended this year’s Seamless in the Kingdom of Saudi Arabia (KSA), there were two key takeaways from us:

  1. It’s hard not to notice how quickly the country is innovating on payments and banking solutions to meet the specific needs of the Kingdom’s residents. Plus, they are making it extremely clear that they are open for global and local business to achieve the Kingdom’s ambitious goals to meet their Saudi Vision 2030.
  1. Collaboration – it’s very important in the Middle East. This sense of community was something that the UK had a lot of success in creating when the fintech scene started in London over a decade ago (mimicking this approach straight from the Silicon Valley playbook). The city has been trying to claim back that feeling of togetherness post-pandemic, something Northern fintech hubs have been very successfully cultivating over the past two years. One downside to the huge success of the city’s early days of creating a community-focused fintech hub – now in 2023, we are erring on the side of exclusivity versus inclusivity, and due to this, we are not innovating as quickly as we once were.

You can see that this community-mindset has helped the substantial growth of the fintech ecosystem in the Middle East, and this is well showcased in the Kingdom’s recent report on the state of fintech.

All in all, over the next 12 months, the UK will most likely bounce back (albeit slowly) from its recent challenges with new lessons learnt on the necessity of prudence and sustainable growth. Plus, there is no doubt that it will be bolstered by international expansion in regions such as the Middle East, and through the current popularity of B2B solutions which can be sector agnostic and create life-changing solutions for overlooked communities, very much showcasing how fintech has rightly started to establish its place in the mainstream.

About Manigo

Manigo, a leading fintech infrastructure platform, enables any business  – with or without a financial licence – within any industry to launch cards, accounts and payments services under their brand.

This can be done through Manigo’s all-in-one fintech platform, API suite and fully-managed offering, including white label solutions, if needed – for companies who require a regulatory umbrella. Manigo also provides a proprietary core banking and infrastructure platform as an out-of-the-box software solution, for those who already have their own licence but lack the tech, or for large corporates who want to pick and choose the underlying vendors.

In a matter of weeks, anyone can build financial offerings that will delight and retain customers, boost revenues and increase brand loyalty. From backend card and payment processing, to middleware integrations and frontend applications, we continue to be the only global, digital banking enabler in the region that covers the entire value chain.

You can find out more information about Manigo on

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