Venture capital appears to be booming in Canada’s financial technology sector.
But, digging deeper, one discovers that the impressive success is not evenly distributed industry-wide.
A record US$7.8 billion was invested in Canadian fintechs in the first six months of 2024, according to data from Pitchbook, a figure which is up dramatically over last year’s full-year total of US$1.1 billion.
However, more than 90% of this year’s value hails from just two deals, notes Georges Pigeon, a partner for KPMG in Canada.
Indeed, private equity investments into two Montréal-based fintechs—Nuvei and Plusgrade—were among the biggest five deals globally, found KPMG International’s H1’24 Pulse of Fintech report.
“These two Canadian deals, among the biggest in the world, reflect the growing fintech ecosystem in Montréal and Quebec more broadly, where the startup scene is thriving thanks to support from institutional investors, and world-class universities are providing a steady stream of talent,” says Pigeon.
Nuvei’s US$6B take-private deal was the largest in Canada, and the second largest globally. The $1B directed toward Plusgrade was the second largest deal in Canada and the fifth largest in the world.
Excluding those two deals, however, total investment was US$500 million—down 26% from the second half of last year, though up nearly 20% from the first half of 2023.
The numbers are strong enough that Pigeon anticipates “the dealmaking environment could be on a path to normalization soon,” albeit one shy of 2021 highs.
In terms of sector-specific success, the payments space (where Nuvei operates) saw the most money invested at more than US$6B across nine deals. Artificial intelligence and machine learning remain venture capital magnets, with AI firms drawing investment dollars across eight deals. The blockchain and cryptocurrency space saw the most deals at 19.
Globally, fintech saw more than $50B invested across over 2,200 deals in H1 2024.
KPMG releases its International’s Pulse of Fintech report twice per year.
