KPMG says investors’ interest in digital assets will drive a strong second half of Canada’s Fintex

Canadian fintech company raised $1.62 billion in early 2025 with digital assets and artificial intelligence (AI) Startups make up the majority of fresh funds, according to Pulse of the KPMG Canada’s Fintech Report.

Fintech funding has slowed globally, but Canadian investors have maintained steady support for ventures at the intersection of finance and emerging technologies. The report has selected blockchain-based infrastructure and AI-driven financial tools as key growth areas.

“Looking at the first half of 2025, it is clear that digital assets have re-emerged as a magnet for investor interest despite the wider shrinkage in venture investment value,” says Edith Hitt, partner at KPMG Canada.

Given the monumental expansion in recent years, AI investment is no surprise. However, if Canadian investors rely on financing their digital assets, they can be caught off guard as risk factors in the crypto market are always controversial among investors.

However, with more custody regulations in the US and further institutional push to legalize certain parts of the digital asset sector, the conversation has clearly begun to change.

“The revival of cryptography coming out from 2024 has been strengthened by a more constructive regulatory tone in the US, a dismissal of the Coinbase litigation and concrete mainstream adoption in stubcoin use cases,” Hitt added.

A careful investor

The $1.6 billion number may seem big, but it may be zoomed out, but macro events like tariffs and higher interest rates actually have fallen year-on-year. The first half of 2025 was less than $2.4 billion invested in the Canadian fintech industry around the same time last year, with $7.5 billion invested in the second half of 2024.

This does not mean that investors are moving away from Fintech funds. Rather, KPMG’s partner in Canadian banking and capital market practices is waiting for the “dried powder” to be deployed. Investors are looking for more “quality companies” and “medium to large-scale stage private equity transactions,” she added.

“Strong” second half

In fact, the KPMG Canada report explained that this trend in investing in AI and digital assets is likely to continue until the second half of 2025.

“Investor interest in digital remains strong from the second half of this year until 2026, driven by the US administration’s bullish views and a lighter regulatory tactile sense of code restriction.

“The focus is on infrastructure, payment rails and tokenization platforms that can be expanded in an integrated way,” she added.

Hit said that things will only get even hotter on the AI ​​side, with “more fintechs going to adopt and deploy agent AI solutions in areas like personal finance, investment management, fraud detection, lending, and more.”