Founded in 1862, Osler integrates traditional law practices with emerging technology from offices across Canada.
This week, the national law firm released its second-annual tech financings report. This year’s edition combed through more than 300 technology-based venture capital equity financings to deliver a range of information and insight into Canada’s ecosystem.
The 2023 report captures both doom and gloom and energetic optimism.
“Headlines and market sentiment painted a tumultuous picture of the technology and venture markets amidst the backdrop of rising interest rates,” the report reads, “leading to increases in the cost of capital, shrinking consumer spending and reduced business investment growth.”
Overall, however, the Osler report noted “impressive signs of growth, renewal, and resilience in the ecosystem.”
According to Osler’s 2023 Deal Points Report, “Ontario and British Columbia have the highest concentration of companies raising a financing round,” it is noted.
These are also the two biggest fintech hubs in Canada, the data shows.
In BC, fintechs account for 2.5% of the region’s financial activity tracked in the report, while in Ontario that figure is over 9%. Some provinces, including Manitoba and the Atlantic Canada provinces, have negligible fintech activity, although ecosystems do appear to be gradually emerging.
Overall, across Canada, “The largest increase in the number of financings by industry was in fintech,” seeing a 6% rise. It’s a hot industry even in a cooler market.
Interestingly, fintechs also saw the biggest jump in valuation among financed firms. The typical fintech startup experienced a five-times leap in value on average after raising capital—a figure that is well ahead of the competition.
Specifically, fintechs saw the highest gains in valuation by far in 2021 (more than 800%), with market realities somewhat deflating the balloons in 2022 (less than 300%).
On this note, one of the largest investments of 2022 was in Neo Financial: a massive Series C round that crowned the Alberta fintech with unicorn status. Neo, founded in 2019, has now raised a total of $300 million.
In 2023, things have to quieted down a bit. Even so, fintechs across Canada are raising capital at various stages, such as Vancouver-based Goose Insurance, which recently secured a $4 million Series A round.