In the first half of 2025, Canadian Fintechs demonstrated resilience, securing US$1.62 billion across 60 deals, according to KPMG International’s Pulse of Fintech H1’25 report.
While this figure marks a significant decline from the record-breaking US$7.5 billion invested in the second half of 2024 and US$2.4 billion in the first half of 2024, the sector’s performance remains steady given the global economic headwinds, including the U.S. trade war and volatile markets.
The report, compiled with data from PitchBook, highlights that Canada’s fintech ecosystem continues to attract substantial interest, particularly in digital assets and artificial intelligence (AI)-focused ventures, signaling a maturing market poised for sustained growth.
The drop in investment from 2024’s highs, which were driven by mega-deals like the US$6.3 billion take-private of Montreal-based Nuvei and a US$1 billion private equity investment in Plusgrade, reflects a normalization rather than a retreat in investor confidence.
“Last year was exceptionally strong for fintech investment, thanks to two major take-private deals,” said Dubie Cunningham, a Partner in KPMG Canada’s Banking and Capital Markets Practice.
“Investment activity has dropped to more stable levels, but when you consider economic shifts like tariffs affecting global trade, the first half was quite robust compared to historical levels.”
Cunningham emphasized that investors remain selective, prioritizing quality companies with strong fundamentals, which has led to longer maturation periods for mid-to-large stage private equity deals.
Digital assets and AI-driven fintechs captured the lion’s share of investments in H1 2025, continuing a trend from 2024.
The resurgence of interest in digital assets, particularly cryptocurrencies and blockchain technologies, was bolstered by a more favorable regulatory environment in the U.S., including the dismissal of the Coinbase lawsuit and growing mainstream adoption of stablecoins.
Edith Hitt, a partner leading KPMG Canada’s Digital Financial Services Transformation team in Québec, noted:
“Crypto’s resurgence coming out of 2024 was reinforced by a more constructive regulatory tone in the U.S. Tokenization is back in strategic roadmaps, and marquee moves like Stripe’s acquisition of Bridge and its partnership with Visa to launch asset-backed credit cards signal maturing commercial models.”
Hitt predicts that investor interest in digital assets will remain strong into 2026, driven by a U.S. administration expected to maintain a lighter regulatory touch.
AI-focused fintechs also drew significant capital, with investors eyeing platforms that leverage generative and agentic AI for applications like automated saving, budgeting, and investment.
This focus aligns with global trends, where AI-enabled fintechs attracted US$7.2 billion in H1 2025, compared to US$8.9 billion for all of 2024.
Despite the decline in total investment, Canada’s fintech sector continues to punch above its weight globally, accounting for 2.7% of global deal count and 3.7% of disclosed value.
Venture capital investment in H1 2025 totaled US$498.2 million across 45 deals, down from US$864.4 million in H2 2024, with the largest deal being Winnipeg-based Conquest Planning’s US$80 million Series B raise led by Goldman Sachs Alternatives.
Globally, fintech investment fell from US$54.2 billion in H2 2024 to US$44.7 billion in H1 2025, reflecting broader market caution.
Looking ahead, industry professionals anticipate a rebound in investment activity in H2 2025, driven by potential federal funding for startups and easing economic pressures.
Cunningham highlighted that investors have “a lot of dry powder” but are focusing on sustainable growth and profitability.
As Canada’s fintech ecosystem continues to make advancements in AI, digital assets, and regulatory tech, it remains a somewhat compelling destination for global capital, navigating challenges with a fair amount of resilience and strategic focus.