Investment in Canadian fintech companies saw a significant decline in the first half of 2023, plummeting to just US$353.7 million across 57 deals. This marks a notable drop from the US$1.09 billion raised in 87 deals in the latter half of 2022, and from US$834.1 million across 109 transactions during the first half of 2022. The slowdown in investment can be attributed primarily to ongoing macroeconomic challenges, as highlighted by KPMG.
Within this landscape, the crypto and blockchain sectors garnered 15 investments, while seven companies in artificial intelligence and six in payment solutions also received funding. Most transactions were concentrated in early-stage and seed-round investments, with no public offerings recorded during this period.
This trend mirrors a broader global investment decline, which decreased to US$52.4 billion across 2,153 deals, down from US$63.2 billion across 2,885 deals in the second half of 2022.
Geoff Rush, a partner and national industry leader in financial services at KPMG, commented, “Investor sentiment remains cautious amid ongoing concerns about the global economy. Fears of a recession, along with high inflation and interest rates, are exerting considerable pressure on valuations, compelling investors to reassess their current strategies and holdings.”