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Canadian fintech investment nears US$1 billion in H1’26 as capital shifts to scale-ready companies
A second-quarter surge, major mortgage-tech financing and renewed foreign interest signal a more selective phase for Canada’s fintech market as AI and regulatory reform spur competition
TORONTO, Aug. 25, 2026 /CNW/ — Investment in Canadian fintechs neared US$1 billion in the first half of 2026, as a sharp second-quarter rebound and several large transactions highlighted a market where investors focused on companies with scale, specialized artificial intelligence capabilities and competitive advantage as new financial infrastructure comes online.
According to KPMG International’s H1’26 Pulse of Fintech report, investment in Canadian fintechs was broadly stable compared with the previous six months, with US$996.7 million invested across 47 deals versus US$1 billion invested across 56 deals in the second half of 2025, according to data compiled by PitchBook. On a year-over-year basis, the drop in investment was more pronounced, with H1’26 deal activity down more than 40 per cent from the US$1.7B invested across 82 deals in the first half of 2025.
Dubie Cunningham, a Partner in KPMG Canada’s Banking and Capital Markets practice, says investors are not retreating from Canadian fintechs. Rather, they are placing fewer, more deliberate bets.
“Canadian fintech has entered a selective maturation phase, with investors going after fewer deals but applying more scrutiny to their investments. They are being more discerning and going after fintechs that have scale, specialized AI capabilities and that are competitively positioned to take advantage of upcoming reforms to Canada’s financial services industry,” she says.
Pulse of Fintech H1’26 Highlights
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US$996.7M total invested across 47 deals in H1’26
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US$375M invested across 24 deals in Q1
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US$621.7M invested across 23 deals in Q2
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Venture capital funding totalled $492.9M across 33 deals in H1’26
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US$94.6M invested across 14 deals in Q1
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US$398.2M invested across 19 deals in Q2
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Corporate venture capital investment totalled $25M across 8 deals
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Merger and acquisition activity totalled US$37M across 12 deals
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Private equity/growth investments totalled US$130.6M across two deals
Investment activity rose substantially in the second quarter to US$621.7 million from US$375 million in Q1, despite virtually unchanged volume. The largest deal was a US$218.6M Series E investment in online mortgage lender Nesto, valuing the company at US$1B. The funding round included new investors such as La Caisse (formerly CDPQ), Fidelity Investments Canada ULC, PICTON Investments and Endeavor Catalyst, and renewed investment from existing investors such as Portage, Diagram, NAventures, National Bank of Canada’s corporate venture capital arm, Fonds de solidarité FTQ and Fondaction.
