London is the European hotspot for venture capitalists when it comes to fintech

Venture capital startup

London remains the top European city for venture capital investment in financial technology firms, according to data released by Mayor Sadiq Khan’s promotional agency.

Investors have poured more than $1 billion into fintech companies across the U.K., including those in London, since the beginning of the year, London & Partners said Thursday.

Fintech firms in the capital raised the overwhelming majority of cash — more than $980 million — and accounted for 90 percent of all fintech investments in the U.K. as a whole.

“The fact that we have seen over £1 billion worth of venture capital investment into London fintech companies since the EU referendum vote offers further proof that global investors still believe London will remain a leading fintech hub for many years to come,” Rajesh Agrawal, London’s deputy mayor for business, said in a statement Thursday.

London & Partners said that 2017 was likely to be a record year for investment in the capital’s fintech sector.

But the British-Indian entrepreneur admitted the capital faced a challenge from the U.K.’s decision to leave the European Union in July 2016.

Brexit challenge

Agrawal said that the U.K.’s withdrawal from the EU would pose “major challenges,” but added that London’s fintech hub “cannot be replicated anywhere else.”

He called for a Brexit that keeps London within the EU’s single market.

“This highlights the need for a Brexit which enables London to maintain its place at the heart of the single market, as the continent’s financial capital,” he said.

The data also showed that venture capital investment in London’s fintech industry alone has topped $1 billion in the 16 months since Britain’s decision to quit the European bloc.

London is also the fourth largest city for venture capital investments, trailing behind San Francisco, Beijing and New York.

Major UK fintech investments this year

A number of U.K. fintech start-ups have raised considerable amounts of capital this year.

One firm, Revolut, raised $66 million in a funding round in July. The digital banking alternative then topped up this investment with an additional $5.3 million just over two weeks later.

Revolut’s equity crowdfunding campaign was apparently so oversubscribed that 40,000 investors — including tennis star Andy Murray — committed more than $22 million to the start-up.

Revolut’s CEO Nikolay Storonsky said that access to capital and London’s financial regulation were among the factors that made it possible to scale his business.

“In just two years, Revolut has raised over $90 million in investment and attracted over 900,000 users,” Storonsky said in a statement Thursday.

“There is no doubt in my mind that a large part of our success is down to choosing London and the U.K. as our headquarters and home.”

Mobile app-based Starling Bank, meanwhile, has said it looks to raise $54 million from investors to drive expansion into international markets.

And mobile payments app Yoyo Wallet raised more than $15 million in investment in June, as it eyed mobile engagement with retailers in both the U.K. and Europe.

“London is the optimal place to set up and scale a fintech company,” Yoyo’s CEO Alain Falys told CNBC in an emailed statement Wednesday.

“Thanks to the unique ecosystem we have in the city — which gives us access to talent, capital, forward-looking retailers and consumers — we’ve grown into a major brand in a very short period of time, becoming Europe’s fastest growing loyalty and mobile payments provider.”

He added that growing his business “probably wouldn’t have been possible to achieve — at least not this soon — in any other city.”

Nine European cities ranked by total venture capital investment in fintech