Canada
United States

Canada

Fintech market in Canada well-positioned for rebound in 2021

Total fintech investment activity (VC, PE and M&A) in Canada 2017–2020*

Source: Pulse of Fintech H2’20, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 31 December 2020.

While fintech investment in Canada was soft throughout most of 2020, Q4’20 saw a rebound in investment to $438 million, including the $261 million acquisition of ‘buy now, pay later’ company PayBright by Affirm, a $86 million raise by Wealthsimple – which earned the wealthtech unicorn status, and the $74 million acquisition of mobile payments company Mobeewave by Apple.

Canada’s fintech ecosystem continued to show incredible diversity, with strong companies focusing on numerous fintech subsectors – from payments, installment financing, and wealthtech to blockchain and open banking.

Canadian fintechs are very well positioned because they are working in really exciting areas of fintech, like Cymend – which is working to provide a kinder mechanism for debt recovery using sophisticated AI or Flinks – which is focused on data integration and open banking. Our fintech market is really evolving and we’re seeing interest not only from Canadian banks and investors, but from global players as well.

John Armstrong

Partner, National Financial Services Leader,KPMG in Canada

United States

Resilient US sees fintech investment more than double in H2’20

Total fintech investment activity (VC, PE and M&A) in the US 2017–2020*

Source: Pulse of Fintech H2’20, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 31 December 2020.

Total fintech investment in the US grew from $20 billion in H1’20 to over $55 billion in H2’20.

Significant liquidity and a continued investor focus on late stage deals drove annual VC investment in fintech to a record $21 billion. In H2’20, wealthtech Robinhood raised two VC funding rounds totalling $1.2 billion while Chime, Affirm, and Bright Health each raised $500 million+.

After dropping to just $9 billion in H1’20, M&A deal value in the US saw a sharp rebound to more than $43 billion in H2’20, led by the $22 billion acquisition of TD Ameritrade.

Fintech investment in the US is expected to remain strong in 2021, with increasing IPO and M&A activity as mature fintechs look to exit.

In H2’20, we saw both sides of the equation in the M&A space in the US. We saw a number of established companies and mature fintechs with strong liquidity taking advantage of opportunities to buy alternative lending platforms with strong technologies – like Amex’s purchase of Kabbage – in a market where those alternative lenders were really struggling.

Robert Ruark

Principal, Financial Services Strategy and Fintech Leader,KPMG in the US