Canadian fintech investment down nearly 75% last year, after record-high 2024
Investment in
Canada’s fintech sector
slowed in 2025, following
record-high investments
the previous year, according to a new report by
KPMG International.
In 2025, investments totalled US$2.4 billion across 113 deals, a drop from the US$9.9 billion invested across 161 deals in 2024, the report said, citing data from PitchBook. The tally includes venture capital, private equity and mergers and acquisitions.
The report said that, despite the year-over-year drop in headline value, the investment environment in 2025 was more measured and disciplined, with sustained interest in later-stage companies, platform acquisitions and
fintech subsectors
such as
artificial intelligence
and
digital assets
.
Last year’s investment activity shows investors are seeking mature and stable
Canadian fintechs
with strong customer penetration and scalable platforms, said Dubie Cunningham, a partner in KPMG Canada’s banking and capital markets practice.
In the first half of the year, there were 71 transactions worth a total of US$1.4 billion, while the second half had 42 deals, for a total of US$988.6 million. Activity in the second half of the year was driven by fewer but larger transactions, primarily focused on AI and digital assets.
To compare Canadian dealmaking on an international scale, the report said US$116 billion was invested globally in 2025 across 4,719 deals, up from US$95.5 billion across 5,533 deals in 2024. The United States accounted for US$56.6 billion of that total, up significantly from US$42.4 billion in the previous year.
Among the Canadian fintech investments in 2025, the three largest were a US$898-million private equity buyout of Converge Technology Solutions by H.I.G. Capital; Wealthsimple’s US$536-million equity raise, co-led by Dragoneer Investment Group and GIC with participation from CPP Investments and existing shareholders; and Ripple’s US$200-million acquisition of the stablecoin payment platform, Rail.
AI and machine learning led investment activity last year, followed by digital assets — sectors that had the highest number of investments for the fourth consecutive year.
KPMG Canada’s national technology risk services leader, Kareem Sadek, said the AI sector’s ability to unlock efficiencies and create new value through automation and advanced analytics is driving the rapid acceleration of investor interest in AI-focused fintechs.
“
As financial institutions modernize their operating models, they’re looking for scalable AI solutions that don’t just streamline processes, but fundamentally reshape how decisions are made,” he said.
Meanwhile, ESG and greentech-focused fintechs, regtechs, payment fintechs, insurtechs and proptechs continued to attract steady investment, while investors remained selective towards cybersecurity and wealthtech firms.
Cunningham said she expects last year’s trend of investors seeking mature and stable fintechs to continue.
“The investment appetite for Canadian fintechs will continue to grow in 2026, as investors prioritize quality, scale and strategic fit, signalling a market that is maturing and aligning more closely with long-term value creation,” she said.
She noted that challenger banks is one area of the fintech market she’s keeping an eye on in 2026, as their funding and scale are maturing, enabling growth and more innovative product offerings.
“Canada’s challenger bank market is poised for momentum in 2026 as newer entrants launch more competitive products, improve customer experiences and strike new partnerships,” Cunningham said, adding that the rollout of Canada’s open banking framework expected this year will also serve as a catalyst for more investment in the sector.
• Email: dpaglinawan@postmedia.com