Canadian FinTech companies raise over $700m in the first half of 2018

Almost 85% of the total capital invested in 2017 has been raised this year already

  • Annual FinTech investment in Canada has increased year on year, almost trebling between 2014 and 2017, reaching $829.5m last year.
  • Over $700m was raised by FinTech companies in Canada in H1 2018, which is equal to 84.9% of the total capital invested in 2017, putting total funding on track to surpass the $1bn mark for the first time.
  • Despite an increase in funding, deal activity slowed between 2016 and 2017 pushing the average deal size from $7.8m to $13.8m during the period. Although the number of transactions has been in decline since 2016, deal activity in 2018 is set to recover and is projected to be higher than last year.

Canadian FinTech funding jumps to a five-quarter high in Q2

  • Q4 2017 ended last year strongly with just under $425m invested across 15 deals, which is over 50% of the total capital raised last year. The figures were boosted by Lightspeed, a POS solution provider, raising a $166m Series D funding from Caisse de Depot et Placement du Quebec in preparation for an IPO in 2019.
  • Deal activity grew to 20 transactions in Q1 2018 but investment dipped to under $230m as the number of sub-$1m deals increased from the previous quarter. Helium Loans, an online microlender, raised $20k as part of the Queen City FinTech accelerator program in March 2018.
  • FinTech investment rebounded in Q2 2018 with almost $500m raised by Canadian companies, making it the strongest quarter since Q4 2017. Toronto-based Flexiti Financial, a provider of POS financing and payment technology, raised a $350m debt round from Credit Suisse in June 2018. This is the largest FinTech deal of the year so far and the proceeds were used to finance the $250 million acquisition of TD Financing Services’ Canadian Private Label Credit Card Portfolio.

More than $650m was raised in the top 10 FinTech deals in Canada in H1 2018

  • Over $650m was raised in the top 10 FinTech deals in Canada in H1 2018, which equates to 92.5% of the total amount invested during the period.
  • Previously mentioned Flexiti Financial raised $350m from Credit Suisse in the largest FinTech deal in Canada to date, which makes up half of the capital invested in Canadian FinTech companies in H1 2018.
  • TouchBistro, a POS solution provider for restaurants, raised $70m in Series D funding from JP Morgan and OMERS Ventures. The new funds will be used to support development of the next generation TouchBistro restaurant operating system, development of new payment solutions, expansion into new and existing markets, and to double the size of the team over the next year.

Payments & Remittances companies have been involved in almost a quarter of all FinTech deals in Canada since 2014

  • Payments & Remittances has been the best represented FinTech subsector in Canada since 2014, claiming 23.3% of total deal activity. Previously mentioned Lightspeed POS, raised $166m in Series D funding which was the largest deal in the subsector to date. The company has raised a total of $292m and processes over $15bn in transactions annually across 100 countries.
  • Infrastructure & Enterprise software companies were involved in a fifth of FinTech deals in Canada between 2014 and the first half of 2018. FreshBooks, a cloud-based accounting software provider, raised a $46.1m Series B round in July 2018 which is the largest deal in the subsector to date. This round was led by Georgian Partners with the funding targeted at fueling its growth in North America and continuing platform innovation for billing, reporting and accounting.
  • WealthTech companies in Canada have attracted just over 10% of deals since 2014, with over $187.1m invested in the subsector. Wealthsimple, a Robo Advisor offering a diversified portfolio of ETFs, raised $51.4m from Power Financial Corporation in Q1 2018. This is the largest deal in the subsector to date and the company now manages £1.2 billion for over 65,000 clients in Canada, the United Kingdom and United States.

The data for this research was taken from the FinTech Global database. More in-depth data and analytics on investments and companies across all FinTech sectors and regions around the world are available to subscribers of FinTech Global. ©2018 FinTech Global

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