Global fintech and funding innovation ecosystem

KPMG: Canadian Fintech Investment Drops in 2022, Mentality Shift to ‘Sensible’ Growth

KPMG | Release | Feb 15, 2023

Canadian fintech investment 2022 - KPMG: Canadian Fintech Investment Drops in 2022, Mentality Shift to 'Sensible' Growth

Investment in Canada's fintech sector dropped last year, as valuations declined more than five-fold and the number of deals slowed significantly towards the end of the year. Despite the slowdown, it was still the second-best year for deal volume.

  • 2022 highlights:  There were 169 fintech investments worth US$1.3 billion in Canada in 2022, down from a record 217 deals worth US$7 billion in 2021, according to data compiled by PitchBook for KPMG in Canada.
    • In H2'22, there were 68 investments worth US$439.9 million (down from H1'22 when there were 85 deals worth US$810 million)
    • The fourth quarter was the weakest quarter of the year, with 27 deals worth $154.8 million (down from the first quarter, which saw 41 deals worth US$285 million and the fourth quarter of 2021 which saw 52 deals worth US$956 million).
    • There were no (fintech) IPOs in Canada
    • Cryptoassets and Payments draw investors:  By sector, payments remained the hottest sector globally, while cryptoassets and blockchain companies garnered the most interest in Canada despite a year of volatility from the collapse of some stablecoins, cryptoasset exchanges and lenders.

See:  FIS Report: Embedded Finance, Web3 and ESG Lead 2023 Fintech Investment Focus

  • Count by Deal type:
    • 57 seed round
    • 41 early-stage VC
    • 30 late-stage VC
    • 20 M&A
    • 9 angel investments
    • 7 buyouts/LBOs
    • 5 PE growth/expansion
  • Investment Count by Sector
    • 51 Cryptoassets
    • 16 Payments
    • 15 RegTech
    • 12 InsurTech
    • 8 Proptech
    • 1 Cybersecurity
    • 1 WealthTech

See:  KPMG Fintech Pulse H1’22 Report: Global Fintech Investments $107.8B across 2,980 Deals

  • Outlook for 2023: 
    • The slump in Canadian and global markets put downward pressure on valuations last year, a trend expected to continue this year.
      • A potential recession, rising interest rates and inflationary pressures are top of mind for investors, so we expect valuations and deal volumes to remain subdued through 2023, with a slight pickup near the end of the year
    • The fintech space is also undergoing a bit of a mentality shift from 'growth at any cost' thinking to focusing on sensible growth and cash preservation
      • In 2021, many companies saw a huge influx of capital from VC investors, so some of those firms won't need cash until sometime in 2023 - maybe even 2024 – because they've streamlined and restructured their operations to make that cash last longer.

View the original release --> here


NCFA Jan 2018 resize - KPMG: Canadian Fintech Investment Drops in 2022, Mentality Shift to 'Sensible' GrowthThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

Latest news - KPMG: Canadian Fintech Investment Drops in 2022, Mentality Shift to 'Sensible' GrowthFF Logo 400 v3 - KPMG: Canadian Fintech Investment Drops in 2022, Mentality Shift to 'Sensible' Growthcommunity social impact - KPMG: Canadian Fintech Investment Drops in 2022, Mentality Shift to 'Sensible' Growth

Support NCFA by Following us on Twitter!







NCFA Sign up for our newsletter - KPMG: Canadian Fintech Investment Drops in 2022, Mentality Shift to 'Sensible' Growth




 

Leave a Reply

Your email address will not be published. Required fields are marked *

9 + 19 =