Fintech Fintech Ecosystems North America Spotlight

Fintech in Canada: the Immigrant Innovation Frontier

Canada’s fintech landscape is in a transient phase. External economic and geopolitical factors have led to a cautious approach from investors, leading to a drop in valuations and investments. Yet, amid these challenges, an emerging segment is capturing the attention of the industry: financial services tailored for newcomers.

Data from KPMG in Canada paints a clear picture of the investment slowdown in the Canadian fintech landscape. The first half of 2023 witnessed investment totalling US$353.7million across 57 deals – a stark contrast from the US$1.09billion across 87 deals in H2 2022 and US$834.1million from 109 deals in H1 2022. 

The dip between the first and second quarter of 2023 is another cause for concern. The first quarter saw investments of US$297.3million across 30 deals, only for it to tumble to a mere US$56.5million across 27 deals in Q2, making it one of the most lacklustre quarters since Q3 2016.

Time for reflection

Such a decline brings back memories of the start of the Covid-19 pandemic when uncertainty and fears gripped the market.

Geoff Rush, partner and national industry leader for financial services at KPMG in Canada, elaborates on the reasons, pointing out concerns regarding the global economy’s health. 

“Investors are still quite concerned about the state of the global economy, with fears of a recession, elevated inflation and interest rates continuing to put a significant strain on valuations, and that’s causing them to pause and reflect on their current investments and strategies,” says Rush. 

“Geopolitical concerns and the failure of several banks in recent months are also playing into investors’ decisions. On the latter, the fact that that some loan portfolios and investment teams have been acquired by financial institutions recently illustrates that there are still opportunities in fintech.”

Venture capital investments reflect a similar trend. Firms pumped US$260.1million into Canadian fintechs in H1 2023 (across 47 deals). In comparison, the first half of 2022 enjoyed an investment of US$805.7 million from 95 deals. Furthermore, the lack of any initial public offerings continues, extending the dry spell from the previous year.

Emerging opportunities 

Despite the prevailing investment slump, there are glimpses of optimism in Canada’s fintech sector.

While investment will continue to be weak in the second half of this year, KPMG expects to see pockets of activity in areas like blockchain, artificial intelligence, machine learning and generative AI.

Georges Pigeon, a partner in KPMG in Canada’s deal advisory practice says the early and seed round activity suggests that investors are interested in funding young, innovative companies at reasonable valuations – a positive sign for the health and growth of Canada’s fintech ecosystem.

“Right now could be good timing to launch a fintech startup as investors would be coming into the early financing rounds. At reasonable valuations, many investors have time to see their investment through, so it’s a good opportunity for new fintechs to emerge.”

Surinderjit Kaur Bhatti (Jeet), CEO of Fathom4sight, a knowledge-as-a-service (KaaS) platform focused on fintech and financial innovation space, further highlights this optimism and illuminates on growth trajectory of specific fintech segments. 

Over 2,600 fintechs operate in Canada, and this number is continuously increasing with new fintechs being founded within the country as well as fintechs from other nations launching products in Canada. 

One of the fastest growing fintech segment in Canada is challenger banks, presently there are more than 90 challengers operating in Canada, Tim Hortons credit card being the most recent addition. 


For 2023, however, Fathom4sight suggests that the top fintech theme is financial services for newcomers to Canada.

“This year, so far each of the big banks in Canada has announced a partnership with an immigrant-focused platform to offer accredited financial products information and financial guidance to newcomers in the country,” says Jeet.

“Recently, Scotiabank announced partnership with a fintech called Nova Credit, that will enable Scotiabank to offer its prospective customers the ability to share their foreign credit reports when applying for Scotiabank products. 

“Lack of credit history in Canada is one of the biggest issue for immigrants, and in recent months we have seen multiple fintechs launching credit score builder offerings, including established fintechs like Neo Financial that just launched a secured credit card that will enable people with low credit score in Canada to enjoy same perks of a normal credit card. 

Borrowell also launched Rent Advantage product that helps build credit history by reporting rental payments every month to Equifax. Increasing immigrant population in Canada is an amazing opportunity for both banks and fintechs in Canada.”


  • Claire is an experienced editor and writer with 25 years of experience in the publishing industry. As a tech journalist, Claire has covered every subject possible over the years, from the launch of broadband and next generation mobile networks to the arrival of the metaverse and Web3.

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