Investment in Canada’s fintech sector slowed in 2025, after a record-high in 2024, according to a new study of the fintech market by KPMG International.  

KPMG International’s Pulse of Fintech H2'25 and FY25 report finds total investment across venture capital, private equity, and mergers and acquisitions hit US$2.4 billion (CDN$3.28 billion) across 113 deals in 2025, according to data collected by PitchBook.

The record 2024 total of US$9.9 billion (CDN$13.5 billion) was invested across 161 deals, but two large transactions comprised a significant amount of that investment.

The report points “to a more measured and disciplined investment environment, with sustained interest in later-stage companies, platform acquisitions and strategically important fintech subsectors such as artificial intelligence and digital assets.”

“Investment accelerated in the second half of 2025, with US$327 million (CDN$448 million) invested in Q3 across 26 deals, and US$662 million (CDN$906 million) across 16 deals in Q4. While deal counts declined quarter over quarter, average deal values increased, reflecting growing investor selectivity and a preference for scale, profitability and proven technology capabilities,” the report notes.

Three large Canadian fintech investment in 2025: 

• A US$898 million (CDN$1,203 million) private equity buyout of Converge Technology Solutions by H.I.G. Capital
• Wealthsimple's US$536 million (CDN$734 million) equity raise, co-led by Dragoneer Investment Group and GIC, with participation from CPP Investments and existing shareholders.
• Ripple's US$200 million (CDN$274 million) acquisition of Rail, strengthening its stablecoin payments platform

Dubie Cunningham, a partner in KPMG Canada's Banking and Capital Markets Practice specializing in fintech, said in a release accompanying report, that “last year's investment activity shows investors are seeking mature and stable Canadian fintechs with strong customer penetration and scalable platforms.”

It is a trend she expects to continue into 2026.

"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 continued.  

One area of the fintech market Cunningham is keeping an eye on this year is challenger banks, where 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. The roll out of Canada's open banking framework — expected this year — will also serve as a catalyst for more investment in the sector," Cunningham said 

Venture capital remains steady 

Venture capital investors poured US$1.2 billion into 82 deals in 2025, according to KPMG. That was consistent with the prior year's investment levels but across fewer transactions.

Venture capital activity was weighted toward the back half of the year, with higher values spread across fewer deals. According to the study, the fourth quarter saw the largest share of venture capital investment, with US$640.6 million (CDN$877 million) invested across 12 deals.

By sector, investment activity was concentrated in AI and machine learning, followed by digital assets, which saw the highest number of investments for the fourth consecutive year.

Fintechs incorporating AI into their technologies are gaining greater investor interest, as such fintechs are seen as creating new value through automation and analytics. Financial institutions are seeking such solutions as they help in modernizing their operating models and reshaping how critical business decisions are made.