Canadian fintech investment to decline in 2025 after megadeal boom

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Despite a year-on-year decline in headline value – US$9.9 billion was invested across 161 deals in 2024, thanks to two large transactions – the report points to a more measured and disciplined investment environment, with continued interest in later-stage companies, platform acquisitions and strategically important companies. fintech Subsectors such as artificial intelligence and digital assets.

Investments accelerated in the second half of 2025, with US$327 million across 26 deals in the third quarter and US$662 million across 16 deals in the fourth quarter. While deal numbers have declined quarter-on-quarter, average deal values ​​have increased, reflecting investors' increasing selectivity and preference for scale, profitability and proven technology capabilities.

The three largest investments in Canadian fintech last year included:

• US$898 million private equity purchase of Converge Technology Solutions by HIG Capital
• Wealthsimple's US$536 million equity raise, co-led by Dragoneer Investment Group and GIC, with participation from CPP Investments and existing shareholders.
• Ripple acquires Rails for US$200 million, makes it stronger stablecoin payment platform

Dubie Cunningham, partner specializing in KPMG Canada's Banking and Capital Markets practice fintechsays investment activity over the past year shows investors are looking for mature and stable Canadian fintechs with strong customer reach and scalable platforms – a trend she expects to continue into 2026.

“Investment appetite for Canadian fintech will continue to grow in 2026 as investors prioritize quality, scale and strategic fit, indicating a market that is maturing and more closely aligned with long-term value creation,” she says.

an area of fintech Ms Cunningham is eyeing challenger banks in 2026, where funding and scale are maturing, enabling growth and more innovative product offerings.

“Canada's challenging bank market is set to accelerate in 2026 as new entrants launch more competitive products, improve customer experiences and launch new partnerships. The roll out of Canada's open banking framework – expected this year – will also serve as a catalyst for greater investment in the sector,” she adds.

Highlights of FY25

• US$2.4 billion invested across 113 deals in 2025 (VC, PE, M&A)
  • In H1'25, US$1.4 billion was invested in 71 deals
  • In H2'25, US$988.6 million was invested across 42 deals
• US$1.2 billion invested in 82 venture capital investments
  • In H1'25, US$440 million was invested across 53 VC deals
  • In H2'25, US$760.4 million was invested across 29 VC deals
• In corporate venture capital, US$313 million was invested across 25 deals
• Globally, US$116 billion was invested across 4,719 deals, rising to US$95.5 billion across 5,533 deals in 2024.
  • fintech Investment in the US increased from $55.4 billion in 2024 to $66.5 billion in 2025, while deal volume declined from 2,627 to 2,409.
  • The United States accounted for US$56.6 billion in total investment, significantly higher than US$42.4 billion in 2024.

Venture capital remains stable amid decline in deal numbers

Venture capital investors invested US$1.2 billion in 82 deals in 2025, in line with last year's investment levels but in fewer transactions; In 2024, $1.2 billion was invested in 120 deals.

VC activity weighed on the back half of the year, with higher valuations spread across fewer deals. The fourth quarter saw the largest share of VC investment, with US$640.6 million invested across 12 deals – the strongest quarter for VC investment since the pandemic-era of 2021, largely driven by Wealthsimple's equity raise.

Corporate venture capital maintains strategic role

Corporate venture capital investments totaled US$313 million across 25 deals in 2025, up from US$242 million across 23 deals last year.

CVC activity was strongest in the third quarter, with US$190 million invested, followed by US$123 million in Q4, as corporate investors focused on targeted partnerships and capacity-driven acquisitions.

Hey, crypto and ESG leads by deal volume

By sector, investment activity was focused on AI and machine learning, followed by digital assets, which saw the highest investment for the fourth consecutive year.

“We are seeing a rapid increase in investor interest in AI-focused fintech, driven by the sector’s potential to unlock efficiencies and create new value through automation and advanced analytics. As financial institutions modernize their operating models, they are looking for scalable AI solutions that not only streamline processes, but fundamentally reshape the way decisions are made,” said Karim Sadek, national technology risk services leader at KPMG Canada. Say.

He added, “With stronger data governance practices and increasingly mature regulatory guidance, investors are now more confident that AI fintechs can have a transformative impact in a controlled and responsible manner, and this will accelerate investment in AI.”

In the digital assets space, Mr Sadek says the passage of the GENIUS Act in the US helped boost investment in cryptoasset-oriented fintech. Meanwhile in Canada, the federal government's regulatory system stable coins It marks another significant shift for digital assets by providing institutional investors with greater regulatory clarity and transparency and a level of investor protection that aligns Canada’s digital asset ecosystem with established global financial standards.

“As Canada is new stablecoin This arrangement will start taking shape in 2026, we expect there will be a significant increase in investor interest digital assets Ecosystem. clear standards for stablecoin Issuance and reserve management reduce regulatory ambiguity and open the door to broader adoption of blockchain-based payments, tokenized assets, and other enterprise grade. digital assets Solution. With increased regulatory certainty, digital assets are poised to attract a larger share of investors fintech Portfolio,” he says.

ESG and greentech-focused fintech, regtech, payments fintech, insurtech and proptech continued to attract steady investments, while investors remained selective towards cybersecurity and wealthtech firms.

global activity

investment globally fintech The market changed in 2025. After three years of declining investment, fintech Investors invested US$116 billion in 4,719 deals, while in 2024 they invested US$95.5 billion in 5,533 deals.

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Source KPMG LLP