Canadian fintech investment dropped significantly in H1 2025
Canadian fintech saw a significant drop in the first half of 2025, according to a KPMG report, although the consultancy still characterized investment levels as “robust.”
H1 2025 investment in Canadian fintechs fell to US$1.62 billion, down from a record US$7.5 billion in H2 2024 and US$2.4 billion in H1 2024.
Investment in Canada fell significantly more than it did it globally. Global fintech investment dropped to US$44.7 billion across 2,216 deals in H1 2025 from US$54.2 billion across 2,376 deals in H2 2024.
Investment in the US market was nearly half of global value, at US$20.9 billion.
Canada accounted for 3.7% of total disclosed value and 2.7% of deal count.
Nonetheless, KPMG says the sharp retrenchment in Canadian fintech investment in the first half is a “normalization” rather than a signal of waning investor interest. The Big Four firm highlighted the difficult economic context of the current trade war as well as the skewing effect of two megadeals in H2 2024.
“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,” said Dubie Cunningham, a partner in KPMG Canada’s banking and capital markets practice. “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.”
Dubie added that investors still have a lot of dry powder, but are being more selective and opting for quality firms with strong fundamentals over speculative investments and future growth prospects.
The largest Canadian deal in H1 2025 – and the eighth largest globally – was the US$916.5 million buyout of Converge Technology Solutions, a Gatineau-based IT consultancy, by H.I.G. Capital. The second-largest deal was the US$201.5 million acquisition of Toronto-based Payfare by Fiserv.
Fintechs in digital assets and AI attracted the majority of investments, continuing a trend from last year.
“Investor interest in digital will remain strong in the second half of the year and into 2026, driven by the US administration’s bullish view and lighter regulatory touch on cryptoassets. The focus will be on infrastructure, payments rails, and tokenization platforms that can scale in compliant, integrated ways,” said Edith Hitt, a KPMG partner who leads the digital financial services transformation team in Quebec.
Hitt expects AI-focused fintechs to attract significant investment for the foreseeable future as agentic AI solutions for fraud detection, lending, and personal finance are increasingly adopted.
“The potential for agentic AI in the Canadian fintech landscape is going to be one of the most notable and exciting trends for investors to watch in the year ahead, with autonomous finance use cases — automated saving, budgeting, and investment — becoming increasingly viable," Hitt added.
