Investment in Canadian fintech companies cooled in the first half of 2025 but remained relatively strong amid volatile global markets and a U.S. trade war, according to KPMG International’s latest Pulse of Fintech report.
Canadian fintechs raised USD $1.62 billion across 60 deals between January and June, 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. Despite the decline, analysts view the shift as a return to more sustainable levels following last year’s two blockbuster transactions.
“Last year was exceptionally strong for fintech investment, thanks to two major take-private deals,” said Dubie Cunningham, Partner in KPMG in Canada’s Banking and Capital Markets Practice.
“Since then, investment activity has dropped to more stable levels. In fact, when you consider the economic shifts such as tariffs affecting global trade, investment in the first half was quite robust compared to historical levels.”
Mega Deals Anchor Activity
The largest Canadian deal — and eighth largest globally — 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.
Cunningham said such transactions highlight investors’ shift in priorities. “Investors are eschewing speculative investments and future growth prospects for companies that have strong underlying fundamentals, sustained profitability and growing market share.”
Venture Capital Dips, Corporate Investment Rises
Venture capital investment in Canadian fintechs fell sharply, with USD $498.2 million deployed across 45 deals, down from USD $864.4 million in the prior half. The biggest VC raise was Winnipeg-based Conquest Planning’s USD $80 million Series B, led by Goldman Sachs Alternatives.
Corporate venture capital, however, surged — USD $278 million across 17 deals, up from just USD $17 million in H2 2024.
Global Perspective
Worldwide, fintech investment also cooled, falling to USD $44.7 billion across 2,216 deals in H1 2025 from USD $54.2 billion in the prior half. The Americas attracted the lion’s share with USD $26.7 billion, led by the U.S. at US$20.9 billion.
Even so, Canada punched above its weight, representing 2.7% of global deal count and 3.7% of disclosed value. “Canada is a small but meaningful slice of global fintech — punching slightly above its weight on deal size and late-stage/buyout presence when big events occur,” said Edith Hitt, Partner at KPMG in Canada and head of the Digital Financial Services Transformation team in Québec.
Hot Verticals: Digital Assets and AI
Digital assets and AI-driven fintechs continued to attract investor interest. Hitt noted crypto’s resurgence, spurred by regulatory clarity in the U.S., the dismissal of the Coinbase lawsuit, and mainstream adoption of stablecoins. She pointed to Stripe’s acquisition of Bridge and partnership with Visa as signals that tokenization is entering the commercial mainstream.
Meanwhile, AI remains a magnet for investment. “AI-oriented fintechs will continue to draw considerable investment in the year ahead,” Hitt said, citing autonomous finance applications such as automated saving, budgeting, and investment.
Despite the dip, KPMG expects Canadian fintech investment to rebound in the second half of 2025, with potential boosts from federal funding announcements for innovative startups in the fall budget.
“There’s still a lot of dry powder ready to be deployed,” Cunningham emphasized. “Investors are demonstrating more selective behaviour, but quality companies with strong fundamentals will continue to find backing.”
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