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Canadian Fintech Booms with $9.5B Despite Global Slump

Fintech Report | Feb 21, 2025

Total fintech investment in Canada 2019 2024 KPMG Pulse of Fintech H2240 - Canadian Fintech Booms with $9.5B Despite Global Slump

Despite a Global Fintech Downturn, Canadian Fintech Broke Records with $9.5B USD Investment

KPMG recently published their annual Pulse of Fintech report for H2'24, providing a global analysis of fintech funding (58 page PDF report).  Globally, fintech investment in 2024 was $95.6 billion across 4,639 deals, which was the lowest level of funding in the last seven years. The combination of rising interest rates, geopolitical and economic uncertainty caused a significant decline in mergers and acquisitions (M&A) and private equity (PE) investments. Having said that, venture capital (VC) investment was pretty steady, and M&A starting showing signs of recovery by year end.  One country however, stood amongst the global crowd.  Yes, Canada's fintech sector recorded its strongest funding year ever, reaching a record-breaking $9.5 billion USD in total investment, particularly in private equity and payments technology.

Canada’s 2024 Fintech Surge

Even without these two massive deals, Canada’s fintech sector still posted $2.2 billion in total investment, almost 2X its 2023 total.  Venture capital opened their wallets deploying $1.09 billion across 90 deals in 2024, up from $737.8 million across 103 deals in 2023.  Worth noting that VC dollars spiked in the second half of the year with $744.9 million across 33 deals, more than double the year prior the amount deployed in H1.

Notable VC deals include Neo Financial ($260 million backed by prominent tech entrepreneurs), Blockstream ($210 million led by Fulgur Ventures), and Koho ($140 million backed by PROPELR Growth, Rockefeller Capital, and BDC) attracted significant funding rounds, underscoring strong investor interest in financial services and blockchain technology.  Private equity played a big role in Canada's fintech boom, highlighting a shift towards later stage investments rather than early stage startup funding.  See KPMG release on Canadian fintech in 2024

See:  How Fintechs Are Tackling Financial Inclusion in Canada

Dubie Cunningham, Partner, Banking and Capital Markets, KPMG in Canada:

"Canada is punching above it’s weight in terms of fintech. From early stage all the way to the exit stage, the pipeline of startups is strong. The key lies in presenting solutions that address significant challenges faced by banks. If you possess a viable business model that demonstrates potential — regardless of current profit margins — there is a wealth of investment opportunities and a clear path to exit."

Slow Year for Global Fintech, But Signs of Recovery

Outside of Canada who bucked the trend, fintech investment declined across all major regions.

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  • The Americas led with $31 billion but this was still a large drop compared to $43 billion in 2023
  • Europe, the Middle East, and Africa recorded $7.3 billion, the lowest since 2017
  • Asia-Pacific fintech investment fell to $5.5 billion

Certain sectors remained strong despite the headwinds.  Payments continued to dominate fintech investment, attracting $31 billion globally. Regulatory technology (regtech) enjoyed further growth, with $7.4 billion in funding.  Digital assets, blockchain and cryptocurrency companies raised $9.1 billion.  Investors prioritized strong revenue models with a clear path to profitability, particularly in AI driven financial services and cybersecurity.

Q4 M&A deal values almost doubled from Q3, suggesting that investors may be regaining confidence after a rather cautious 2024, such that 2025 could see an acceleration of acquisitions.

2025 Outlook

Cautiously optimistic.  Interest rates have been coming down in major economies potentially unlocking fresh capital.  AI financial services, cybersecurity, and digital identity solutions stand to benefit as financial institutions continue to integrate automation and fraud prevention tools into their ecosystem.

See:  How AI is Shaping the Future of Financial Services in Canada

For Canada, in addition to automation and digital banking expansion, open banking regulations are moving closer to implementation, so expect new fintech startups to emerge driving another wave of investment.

NCFA Jan 2018 resize - Canadian Fintech Booms with $9.5B Despite Global SlumpThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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