(Toronto) Investment in Canadian fintech companies fell more than 50% in the first half of the year, a study by KPMG reveals.
Posted at 3:25 p.m.
The audit firm says fintech firms in the country invested US$810 million through 85 deals in the first half of 2022, compared to US$1.9 billion in the second half of 2021.
The decline was also notable compared to the same period in 2021, when investments totaling US$5.4 billion were made through 108 deals, the company added.
However, KPMG warned that the first half of 2021 represents a unique case as it is considered one of the strongest periods on record for investing.
KPMG says most of Canada’s fintech investments in the first half of the year came from venture capital, including 25 seed investments, 23 early-stage investments and 17 later-stage funding investments.
The drop in fintech investment comes amid a broader decline in the sector, which has prompted several start-ups and big tech companies to lay off workers and cut spending.
“The market slowdown and resulting drop in tech valuations has caused investors to hit the ‘pause button’ over the past few months, but with so much investment in fintech over the past year, we see it as a rebalancing of expectations or a reset of the sector, of sorts,” observed KPMG Canada’s head of financial services for national industry, Geoff Rush, in a press release.
“We expect fintech to continue to generate interest in the second half of the year, but investors will be more selective about where they deploy their capital. »