Investment in Canadian financial technology firms slowed significantly through 2023, found KPMG’s latest Pulse of Fintech report.
Investment in Canadian fintechs dropped to US$920 million across 109 total deals in 2023, down from US$1.29 billion invested across 208 deals in 2022.
It is the second consecutive year in which investment dropped following record highs in 2021.
Even so, financial technology innovation forges on in Canada, and some innovators are still securing capital for growth despite a challenging fundraising environment triggered by what KPMG calls a “confluence of factors”—economic slowdown, market volatility, geopolitical tensions, and more are combining to create points of friction for fintech startups throughout the country and worldwide.
“The investment landscape for Canadian fintechs faced numerous challenges in 2023, including elevated capital costs, market volatility and a stalling economy,” Geoff Rush, KPMG in Canada’s National Industry Leader for Financial Services, stated in the Canadian report.
But Rush envisions a turnaround on the horizon.
“It appears the bottom has been reached and some of those headwinds will start to become tailwinds as economic pressures eventually begin to ease,” he continued. “Factors point to growth for Canada’s fintech ecosystem.”
Let’s take a look at a few Canadian fintechs who have raised funding within the last few months.
Calgary’s Virtuo
Virtuo, a homeownership concierge platform that connects and streamlines tasks associated with moving and beyond, secured a $3.5 million seed funding round led by ATB Private Equity and TELUS Ventures in December.
Chief executive officer Casey Kachur says her company’s aim is to “make the homeownership experience amazing.”
“This investment enables us to do just that,” the cofounder stated at the time of the transaction, “and because we’re capital efficient, we can make it go a long way to continue improving how we provide our first-class customer experience and empower homeowners through the moving process.”
This funding will fuel Virtuo’s expansion across Canada and into the U.S., enabling it to bring its customer experience to more homeowners and partners, including realtors, mortgage providers, and builders.
With this latest round, Virtuo has now raised over $7 million.
Virtuo operates in over a dozen North American cities, including Toronto.
Toronto’s Wisedocs
After doubling its customer base in 2023, Wisedocs announced in January the closing of a Series A financing round.
The Toronto-based company is a medical record indexing, review, and AI summarization software platform for insurance carriers, healthcare providers, law firms, and more.
The oversubscribed round, at US$9.5 million, was led by Toronto-based early-stage B2B fintech investment firm Information Venture Partners, Thomson Reuters Ventures, and ManchesterStory.
The Series A will further enable Wisedocs to expand team, product, and sales territories, according to a statement released by the firm.
“This latest financing round proves the success of our most recent technological advancements,” believes Connor Atchison, founder of Wisedocs.
Atchison says the claims ecosystem is “a siloed and slow-moving machine” that is ripe for disruption by AI-based tech.
“By harnessing the power of modern technology, insurers can better prepare for the financial, economic, and environmental pressures of an unpredictable global world—which goes a long way towards managing industry risk,” wrote Atchison, who cofounded Wisedocs alongside Jenna Earnshaw, for Fintech.ca last year.
The Series A round follows Wisedocs’ $4M Seed round in 2022 after launching in 2021.
Victoria’s Peloton
Peloton Technologies has announced the closing of a seed round.
In November, the Victoria-based financial technology firm raised $2 million in investment, with funding “earmarked for activities that contribute to the company’s rapid growth trajectory.”
The seed capital is set to serve as “a catalyst to our organic growth initiatives,” according to John MacKinlay, who serves as executive chair of the board for the BC fintech.
Founded by Phil Leitch and chief executive officer Craig Attiwill, Peloton’s core product is a platform that uses technology to simplify complex payment processes and offers businesses transactional visibility.
In July, as part of the Business Scale-Up and Productivity Program, Peloton Technologies was awarded $1.5M—becoming PacifiCan’s most-funded fintech.
Peloton followed that up by acquiring KIS Payments, a Canadian payments processor, in October.
MacKinlay said Peloton’s seed round is “a precursor to a larger capital raise” planned for 2024.
Toronto’s d1g1t
d1g1t, an Enterprise Wealth Management Platform offering analytics and risk management tools that enable firms to elevate value to clients, raised in November a round of capital funding featuring MissionOG CI Financial, National Bank of Canada’s venture arm NA Ventures, Illuminate Financial, Purpose Financial, FigTree Financial, and CIBC Innovation Banking.
“We empower wealth management firms to transition into a new business model that is driven by technology and analytics, and provides a richer experience for their clients,” the company explains online. “For this purpose, we have built an innovative cloud-based technology platform, powered by advanced analytics, for financial advisers and their clients.”
The company was founded by Dan Rosen, chief executive; Philippe Rouanet, chief of operations; and Benoit Fleury, chief product officer.
The company was also recognized by Deloitte in its annual Technology Fast 50 program, ranking 24th with a three-year revenue growth of nearly 900%.
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