Investment in Canadian fintechs dropped significantly in the first half of 2025 compared to the second half of 2024, according to KPMG International’s “Pulse of Fintech H1’25” report.
In 2024’s second half, investments totaled US$7.5 billion; the amount slipped to US$1.62 billion across 60 deals in the first half of this year. The latest figure is also lower than the investment total recorded in the first half of 2024 (US$2.4 billion).
Nonetheless, KPMG Canada partner and fintech specialist Dubie Cunningham said that the decline in investments represents normalization rather than weakening interest.
“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,” Cunningham said in a statement.
KPMG highlighted H.I.G. Capital’s $1.3 billion buyout of IT consulting firm Converge Technology Solutions, which it said was the biggest deal in Canada, as well as Fiserv, Inc.’s acquisition of Payfare Inc. for US$201.5 million.
“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,” Cunningham said. “Investors are eschewing speculative investments and future growth prospects for companies that have strong underlying fundamentals, sustained profitability and growing market share.”
Most investments were made into digital assets and artificial intelligence/machine learning-related fintechs, similar to last year. Globally, fintech investment dropped to US$44.7 billion across 2,216 deals in the first half of 2025 from US$54.2 billion across 2,376 deals in the second half of 2024. Canada makes up 2.7 percent of the global fintech deal count and 3.7 percent 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,” said Edith Hitt, who heads up KPMG Canada’s digital financial services transformation team in Québec.
Venture capital investment values in 2025’s first half fell four times compared to 2024’s second half, with capital investors injecting US$498.2 million into 45 deals compared to US$864.4 million across 40 deals.
“The fallout from the U.S. trade war cast a chill on venture capital investments, but we expect activity to bounce back in the second half of the year. Looking ahead here in Canada, investors will likely be watching for potential federal funding announcements for innovative startups and growth companies in the government’s first budget this fall,” Cunningham said.
Hitt predicted that digital assets would draw significant interest.
“If we look at the first half of 2025, it’s clear that digital assets have re-emerged as a magnet for investor interest, despite the broader contraction in venture investment values. Crypto’s resurgence coming out of 2024 was reinforced by a more constructive regulatory tone in the U.S., the dismissal of the Coinbase lawsuit, and tangible mainstream adoption in stablecoin use cases. Tokenization is back in strategic roadmaps, and when you see marquee moves like Stripe’s acquisition of Bridge and the ensuing partnership with Visa to launch asset-backed credit cards, it signals to investors that commercial models are maturing,” Hitt said. “Investor interest in digital will remain strong in the second half of the year and into 2026, driven by the U.S. 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.”
She also anticipated that AI-centered fintechs would spur major investment.
“AI-oriented fintechs will continue to draw considerable investment in the year ahead. 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 said.
PitchBook collated the data used in the “Pulse of Fintech H1’25” report for KPMG International. Mergers and acquisitions, private equity, and venture capital were included in the deal counts.