After hitting a record high last year, Investment in Canadian fintechs fell in the first half of 2025 but remained relatively robust amid heightened uncertainty from the U.S. trade war and volatile markets, according to KPMG International’s Pulse of Fintech H1’25 bi-annual report.
A total of US$1.62 billion was invested in Canadian fintechs across 60 deals in the first half of the year, down significantly from the record US$7.5 billion invested in the second half of 2024 and the US$2.4 billion invested in the first half of last year, according to data compiled by PitchBook for KPMG International. Deal counts include mergers and acquisitions, private equity and venture capital.
On a global scale, fintech investment fell from US$54.2 billion across 2,376 deals in H2’24 to US$44.7 billion across 2,216 deals in H1’25.
Dubie Cunningham, a Partner in KPMG in Canada’s Banking and Capital Markets Practice who specializes in fintech says the drop in investment activity in H1’25 should be seen as normalization rather than waning investor interest in fintechs, as last year’s record high was anchored by two large mega deals.
“Last year was exceptionally strong for fintech investment, thanks to two major take-private deals. Since then, investment activity has dropped to more stable levels. In fact, when you consider the economic shifts such as tariffs effecting global trade, investment in the first half was quite robust compared to historical levels,” Ms. Cunningham notes.
“There’s still a lot of dry powder ready to be deployed by investors, but they are demonstrating more selective behaviour than in previous years. They’re looking for quality companies and we’re seeing longer tails for maturing mid-to-large stage private equity deals,” she says.
The largest deal in Canada – and eighth largest globally – was the US$916.5 million (CAD$1.3 billion) buyout of Gatineau, Quebec-headquartered IT consulting firm Converge Technology Solutions by H.I.G. Capital, a Miami-based private equity firm. The second largest deal was the US$201.5 million acquisition of Toronto-based Payfare Inc. by Fiserv, Inc.
Ms. Cunningham says such deals show acquirers in the fintech space have shifted their focus. “Investors are eschewing speculative investments and future growth prospects for companies that have strong underlying fundamentals, sustained profitability and growing market share.”
Edith Hitt, a partner in KPMG in Canada who leads the Digital Financial Services Transformation team in Québec says that even though Canada accounts for 2.7 per cent of global fintech deal count and 3.7 per cent of total disclosed value, “Canada is small but meaningful slice of global fintech – punching slightly above its weight on deal size and late-stage/buyout presence when big events occur.”
