Investment in Canadian Fintech Sector Shows Stability Following Record Year in 2024, According to KPMG
In the first half of 2025, the fintech investment landscape in Canada experienced a slight downturn compared to the record-breaking figures of the previous year. According to KPMG International's latest Pulse of Fintech report, Canadian fintech investment cooled during this period.
The investment in the first half of 2025 was down from a record USD $7.5 billion in the second half of 2024 and USD $2.4 billion in the same period last year. However, it is important to note that corporate investment in Canadian fintechs rose during this period, amounting to USD $278 million across 17 deals. This shift indicates a move away from venture capital (VC) investment and towards more stable, corporate-backed ventures.
The largest Canadian deal in the first half of 2025 was the USD $916.5 million buyout of Converge Technology Solutions by Miami-based H.I.G. Capital. Toronto-based Payfare followed with a USD $201.5 million acquisition by Fiserv. These significant transactions, while fewer in number, suggest that quality companies with strong underlying fundamentals, sustained profitability, and growing market share continue to attract investor interest.
The Americas, led by the U.S., attracted the largest share of global fintech investment, with USD $26.7 billion. Despite the dip in Canadian fintech investment, Canada represented 2.7% of global deal count and 3.7% of disclosed value in H1 2025, indicating a significant presence in the global fintech market.
The decline in investment is viewed as a return to more sustainable levels following last year's two blockbuster transactions. Investors are eschewing speculative investments and future growth prospects for companies that have strong underlying fundamentals. This selective behavior is a trend that is being observed globally, with investors focusing on quality companies.
Digital assets and AI-driven fintechs continue to attract investor interest. The resurgence of cryptocurrency is spurred by regulatory clarity in the U.S., the dismissal of the Coinbase lawsuit, and mainstream adoption of stablecoins. AI remains a magnet for investment, with autonomous finance applications such as automated saving, budgeting, and investment expected to draw considerable investment in the year ahead.
Looking forward, KPMG expects Canadian fintech investment to rebound in the second half of 2025, potentially boosted by federal funding announcements for innovative startups in the fall budget. Moreover, a recent investment activity in Canada by a consortium led by Frank Giustra, which invested over 45 million CAD into NexMetals Mining, indicates that there is still a substantial amount of capital ready to be deployed in Canadian fintech.
In conclusion, while the first half of 2025 saw a dip in fintech investment in Canada, the trend is expected to reverse in the second half of the year. The focus on quality companies with strong fundamentals, the continued interest in digital assets and AI, and the upcoming federal funding announcements all point towards a promising future for the Canadian fintech sector.
