Fintech Investment Drops

After a record-breaking year in 2021, investment in Canadian fintech dropped by more than 50 per cent in the first six months of 2022, mirroring a broader decline in the technology sector, says KPMG’s ‘Pulse of Fintech H1’22 Global report.’ Canadian fintech companies saw US$810 million in total investment across 85 deals in the first half of 2022, down from US$1.9 billion in the second half of 2021. It was also a notable drop compared to the first half of 2021, which saw US$5.4 billion in investment across 108 deals. However, the first half of 2021 was an outlier, with one of the strongest quarters on record. “The market downturn and ensuing lower tech valuations caused investors to hit the ‘pause button’ over the last few months, but with so much investment flowing into fintech last year, we see it as a re-balancing of expectations or a sector reset if you will,” says Geoff Rush, national industry leader for financial services at KPMG in Canada. “We expect fintech to continue to draw interest in the second half of the year, but investors will be more selective about where they deploy capital.” The majority of fintech investment in Canada in the first half of the year came from venture capital and more than one-third of all fintech deals happened in the cryptoasset space, despite a downturn in that market.