KPMG Sees Strong Second Half for Canadian Fintechs After Crypto, AI Raked in $1.6B Funding

Canadian fintech corporations raised $ 1.62 billion within the first half of 2025, with digital property and synthetic intelligence (Ai) Startups take the lion’s share of latest financing, based on that of KPMG Canada Pulse of fintech report.

Whereas fintech financing worldwide delayed, Canadian traders maintained regular help for corporations on the intersection of finance and rising expertise. The report disabled corporations based mostly on 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’s clear that digital property have been re -created as a magnet for investor curiosity, regardless of the broader contraction of the funding values ​​of the enterprise,” mentioned Edith Hitt, a companion at KPMG Canada.

AI investments aren’t shocking, given the monumental growth in recent times. Nevertheless, Canadian traders who flip to finance digital property may be considerably overwhelmed, as a result of the danger issue of the Crypto market has all the time been beneath dialogue amongst traders.

Nevertheless, with extra pro-Crypto rules within the US and the additional institutional push that legitimizes sure elements of the sector digital property, the dialog has clearly begun to shift.

“Cryptos’s revival that got here from 2024 was bolstered by a extra constructive regulatory tone within the US, the dismissal of the Coinbase proper enterprise and tangible mainstream adoption in Stablecoin -USe Circumstances,” Hitt added.

Cautious traders

Though the variety of $ 1.6 billion could appear nice, the figures have really fallen on an annual foundation because of macro occasions reminiscent of charges and better rates of interest. The report mentioned that the primary half of 2025 information was decrease than $ 2.4 billion invested within the Canadian fintech business in the identical interval final 12 months, and invested $ 7.5 billion within the second half of 2024.

This doesn’t imply that traders have been shun away from fintech financing; As a substitute, there’s numerous ‘dry powder’ ready for use, mentioned Dubie Cunningham, a companion in KPMG in Canada’s Banking and Capital Markets Observe. Traders are in search of extra “high quality corporations” and starvation for “ripening middle-to-big stage personal fairness offers,” she added.

‘Sturdy’ second half

The KPMG Canada report even defined that this pattern of investments in AI and digital property will most likely happen within the second half of 2025.

“Investor curiosity in digital will stay robust within the second half of the 12 months and in 2026, pushed by the Bullish imaginative and prescient of the US authorities and lighter regulatory contact on cryptoassets, Hitt mentioned.

“The main target can be on infrastructure, cost rails and tokenization platforms that may be scaled up on conforming, built-in methods,” she added.

Hitt mentioned that issues will solely warmth up extra on the AI ​​facet, “as extra fintechs more and more undertake and implement agent AI options in areas reminiscent of private funds, funding administration, fraud detection and loans.”