FinTech investment in Canada has more than tripled in the last five years

The capital raised from larger deals, valued at $50m and over, has been increasing since 2014

  • Total amount invested in FinTech companies in Canada has been on a steady rise since 2014 and totalled $873.5m in 2018. This is 3.0 times greater than the amount invested in 2014. Although, the number of deals dropped by 17.9% during this time period.
  • FinTech investment in Canada in the first three months of 2019 saw 15 deals raise $156.4m, which is 17.9% of the capital raised last year.
  • The largest WealthTech deal in the first quarter of 2019 was raised by Mylo in a $1.9m seed round led by Desjardins Venture Capital. The startup, which rounds up and invests your spare change for you, will use the investment to develop their AI technology and provide a full-service personal financial management platform.

Canadian FinTech companies raised $156.4m in the first quarter of 2019

  • The amount invested in FinTech companies in Canada was relatively steady during 2018, except in the second quarter. During this quarter, value invested was only 45.7% of Q3’s level. Deal activity, however, remained the same in both quarters.
  • The number of deals in Q1 2019 was 1.5 times greater compared with the last quarter of 2018. Companies that offer cryptocurrency services made up one third of the deals in Q1 2019, but raised only 14.9% of the total investment in the same quarter. Coinbask, a decentralized platform to buy and sell baskets of tokenized digital assets, raised an undisclosed amount in a pre-seed round at the end of March.
  • More than half of the value invested so far this year was raised by Vena Solutions in a CAD$115m Series D round. The financial planning and analysis firm offers software to help with enterprise planning, budgeting and forecasting. Their software is used by more than 500 companies.
  • Investment in Canadian FinTech companies, in the first three months of the year, was only 69.2% of the level compared with the corresponding quarter in 2018. Additionally, there were only 15 deals in Q1 2019 compared with 19 deals in the same quarter last year.

Infrastructure & Enterprise Software companies have been attracting the most FinTech deals in Canada since 2014

 

  • Infrastructure & Enterprise Software companies are responsible for the most deals across the last five years, companies in this subsector are responsible for 21.2% of funding rounds in Canada since 2014.
  • So far this year there have been two transactions completed by Infrastructure & Enterprise Software companies. Toronto-based Zafin raised $17.2m in a Series B round. The startup provides pricing technology for corporate and retail banks. Additionally, ZayZoon, a payroll service add-on that allows employees to access their earned wages before payday, completed a $15m funding round.
  • Payments & Remittances, the second most popular subsector, has seen 20.3% of deal activity in Canada since 2014. The number of deals in this subsector is expected to grow in 2019 with increasing partnerships between financial institutions and FinTech firms.
  • Deal sizes have been noticeably smaller in the Infrastructure & Enterprise Software subsector (average deal size, $8.0m) compared with Payments & Remittances ($13.3m). The largest transaction in the Infrastructure & Enterprise Software subsector since 2014 is ACL’s $50m corporate round, which was completed in the last quarter of 2017. The Vancouver-based company has been delivering risk management, compliance and audit software to large private and public organisations.

The top 10 Canadian FinTech deals raised more than $150m in Q1 2019

  • The top ten FinTech transactions in Canada raised $154.1m in the first three months of the year, equal to 98.7% of the total capital invested in this quarter.
  • The previously mentioned Vena Solutions deal is the largest of the year so far. US growth equity firms JMI Equity and Centana Growth Partners both participated in the round. The recent capital injection will be used to grow and scale the company.
  • Bitfarms, a bitcoin mining firm, raised $20m in a Post-IPO debt round from Dominion Capital. This funding will be put towards the company’s expansion strategy, which will include the purchase of higher efficiency mining hardware.

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. ©2019 FinTech Global

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