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

Canadian fintech corporations raised $1.62 billion in the primary half of 2025, with digital belongings and synthetic intelligence (AI) startups taking the lion’s share of contemporary funding, in line with KPMG Canada’s Pulse of Fintech report.

While fintech funding slowed globally, Canadian buyers maintained regular assist for ventures on the intersection of finance and rising expertise. The report singled out corporations constructing blockchain-based infrastructure and AI-driven monetary instruments as main development areas.

“If we look at the first half of 2025, it’s clear that digital assets have re-emerged as a magnet for investor interest, despite the broader contraction in venture investment values,” stated Edith Hitt, a accomplice at KPMG Canada.

AI investments aren’t stunning, given its monumental enlargement in current years. However, Canadian buyers turning to digital belongings funding may catch some off guard, as the danger issue of the crypto market has at all times been up for debate amongst buyers.

However, with extra pro-crypto rules in the U.S. and additional institutional push legitimizing sure components of the digital belongings sector, the dialog has clearly began to shift.

“Crypto’s resurgence coming out of 2024 was reinforced by a more constructive regulatory tone in the U.S., the dismissal of the Coinbase lawsuit, and tangible mainstream adoption in stablecoin use cases,” Hitt added.

Cautious buyers

While the $1.6 billion quantity could seem massive, zooming out, the numbers have really dropped year-over-year because of macro occasions corresponding to tariffs and better rates of interest. The report stated the primary half of 2025 information is decrease than $2.4 billion invested in the Canadian fintech business in the identical time interval final yr, and $7.5 billion invested in the second half of 2024.

This doesn’t suggest buyers are shying away from fintech funding; quite, there’s a number of ‘dry powder’ ready to be deployed, stated Dubie Cunningham, a Partner in KPMG in Canada’s Banking and Capital Markets Practice. Investors are wanting for extra “quality companies” and urge for food for “maturing mid-to-large stage private equity deals,” she added.

‘Strong’ second half

In reality, KPMG Canada’s report defined that this pattern of investing in AI and digital belongings is prone to proceed into the latter half of 2025.

“Investor interest in digital will remain strong in the second half of the year and into 2026, driven by the U.S. administration’s bullish view and lighter regulatory touch on cryptoassets, said Hitt.

“The focus can be on infrastructure, funds rails, and tokenization platforms that may scale in compliant, built-in methods,” she added.

Hitt said things will only heat up more on the AI side, “as extra fintechs more and more undertake and deploy agentic AI options throughout areas like private finance, funding administration, fraud detection and lending.”