Canadian fintech firms raised $1.62 billion within the first half of 2025, with digital belongings and synthetic intelligence (AI) startups taking the lion’s share of recent funding, based on KPMG Canada’s Pulse of Fintech report.
Whereas fintech funding slowed globally, Canadian buyers maintained regular assist for ventures on the intersection of finance and rising expertise. The report singled out firms constructing blockchain-based infrastructure and AI-driven monetary instruments as main progress areas.
“If we have a look at the primary half of 2025, it is clear that digital belongings have re-emerged as a magnet for investor curiosity, regardless of the broader contraction in enterprise funding values,” stated Edith Hitt, a associate at KPMG Canada.
AI investments aren’t stunning, given its monumental enlargement lately. Nonetheless, Canadian buyers turning to digital belongings funding would possibly catch some off guard, as the danger issue of the crypto market has at all times been up for debate amongst buyers.
Nonetheless, with extra pro-crypto laws within the U.S. and additional institutional push legitimizing sure elements of the digital belongings sector, the dialog has clearly began to shift.
“Crypto’s resurgence popping out of 2024 was bolstered by a extra constructive regulatory tone within the U.S., the dismissal of the Coinbase lawsuit, and tangible mainstream adoption in stablecoin use instances,” Hitt added.
Cautious buyers
Whereas the $1.6 billion quantity could appear massive, zooming out, the numbers have truly dropped year-over-year attributable to macro occasions comparable to tariffs and better rates of interest. The report stated the primary half of 2025 knowledge is decrease than $2.4 billion invested within the Canadian fintech business in the identical time interval final yr, and $7.5 billion invested within the second half of 2024.
This doesn’t suggest buyers are shying away from fintech funding; quite, there may be loads of ‘dry powder’ ready to be deployed, stated Dubie Cunningham, a Associate in KPMG in Canada’s Banking and Capital Markets Observe. Traders are on the lookout for extra “high quality firms” and urge for food for “maturing mid-to-large stage personal fairness offers,” she added.
‘Robust’ second half
The truth is, KPMG Canada’s report defined that this pattern of investing in AI and digital belongings is more likely to proceed into the latter half of 2025.
“Investor curiosity in digital will stay robust within the second half of the yr and into 2026, pushed by the U.S. administration’s bullish view and lighter regulatory contact on cryptoassets, stated Hitt.
“The main focus can be on infrastructure, funds rails, and tokenization platforms that may scale in compliant, built-in methods,” she added.
Hitt stated issues will solely warmth up extra on the AI aspect, “as extra fintechs more and more undertake and deploy agentic AI options throughout areas like private finance, funding administration, fraud detection and lending.”