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Fintech remains one of the fastest-growing sectors in the global venture capital landscape, attracting substantial attention and investment. In Canada, while fintech is gaining significant traction, the funding levels still lag behind those seen in the U.S. Despite this, fintech continues to be a focal point for Canadian venture capitalists and investors, particularly as it presents opportunities
Expected 2030 Fintech revenues
Expected Fintech CAGR (2023-2028)
Expected 20230 Retail Global Asset Share
As part of our commitment to empowering our investors with greater insights, we aim to provide more detailed, sector-specific reports that highlight key trends, opportunities, and challenges in the private markets. In this first edition, we focus on the fintech sector, which continues to grow rapidly and offers promising investment potential.
Our goal with this report is to keep you informed of emerging opportunities in private markets, particularly those that align with the values and goals of our Elite Circle members. By diving deep into key sectors like fintech, we hope to equip you with the knowledge and context needed to make more informed investment decisions. As part of our ongoing mission to democratize access to private capital, we aim to foster a deeper understanding of how specific industries are evolving and how our investors can take advantage of these changes.
With this detailed sector spotlight on fintech, we provide you with insights into where the market stands, emerging trends, and why fintech remains an attractive focus for venture capital. We hope that this report will serve as a valuable resource in your investment journey, keeping you ahead of the curve in Canada’s dynamic private markets.
Fintech remains one of the fastest-growing sectors in the global venture capital landscape, attracting substantial attention and investment. In Canada, while fintech is gaining significant traction, the funding levels still lag behind those seen in the U.S. Despite this, fintech continues to be a focal point for Canadian venture capitalists and investors, particularly as it presents opportunities for innovation and disruption in the financial services industry.
According to KPMG's Global Pulse of Fintech report, in 2024, the U.S. accounted for a remarkable 29.2% of all fintech startup investments globally, signaling the country’s strong commitment to supporting financial technology innovation. In stark contrast, Canada’s funding rate for fintech startups was just 6.7%1—a fraction of the U.S. figure, illustrating the disparity in venture capital investment between the two countries. Despite Canada’s smaller share, fintech remains one of the most active sectors for investment, with $9.5 billion invested in Canadian fintechs in 2024, a significant increase from previous years, driven by major deals like Nuvei’s $6.3 billion buyout1.
The difference in funding levels becomes even more evident when we compare the total dollar amounts raised by entrepreneurs in both countries. From 2013 to 2023, U.S. entrepreneurs raised an average of $156 billion annually, while Canada’s strongest year saw just $7 billion in total capital raised1. With a population size just eight times smaller than the U.S., Canada’s total venture capital investment is roughly 22 times less per capita than the U.S., underscoring the ongoing funding gap1.
Fintech’s potential to reshape the financial industry remains enormous, particularly as innovations like blockchain, artificial intelligence (AI), and open banking continue to drive significant changes in consumer behavior and business models. Despite the funding challenges, Canadian investors are increasingly recognizing fintech's disruptive potential, with the sector positioned to experience rapid growth in the coming years. However, for Canada to close the funding gap and realize the full potential of its fintech sector, it will require continued focus on innovation, investment, and fostering an environment that supports fintech startups and entrepreneurs.
As these technologies evolve, the question remains: Can Canada leverage the momentum behind fintech and close the investment gap to truly compete on the global stage? The answer may lie in increasing access to funding and supporting Canadian fintechs as they scale and innovate in an increasingly globalized market.
The fintech sector continues to exhibit remarkable growth, with projections indicating a compound annual growth rate (CAGR) significantly surpassing that of traditional industries. According to a report by Boston Consulting Group, financial technology revenues are projected to increase sixfold, rising from $245 billion to $1.5 trillion by 2030.
Further emphasizing this trend, McKinsey & Company's research suggests that between 2023 and 2028, fintech revenues are expected to grow at an annual rate of 15%, nearly three times faster than the 6% annual growth anticipated for traditional banking.
This rapid expansion positions fintech as a pivotal force in transforming the financial landscape, with key growth areas including digital banking, fraud detection, AI-driven financial services, and more. The integration of advanced technologies such as blockchain, artificial intelligence, and open banking is driving significant changes in consumer behavior and business models, further fueling the sector's growth.
Jan Christopher Arp, Founding Managing Partner of The Holt Xchange, remarks that following market corrections, fintech valuations are currently an estimated 31% below the median of all sectors. This presents a compelling opportunity for investors, as the sector is poised for a rebound, particularly given its fundamental role in transforming financial services.
Fintech giant Plaid, known for linking consumers’ bank accounts to apps, saw its valuation drop from over $13 billion in 2021 to $6.1 billion in a new funding round in April 20255. Similarly, the London Stock Exchange Group (LSEG) marked down the valuation of its 7.2% stake in fintech platform PrimaryBid by 87%, from £31 million at the end of 2023 to just £4 million by the end of 20246.
These valuation corrections reflect broader market trends affecting fintech, but they also present opportunities for investors as the sector remains a key player in transforming financial services, with the potential for strong future growth. As fintech continues to play a critical role in shaping the future of financial services, these market corrections could create valuable investment prospects as the industry rebounds.
Canadian fintechs like Manzil, a FrontFundr success story, and Velox Trade are demonstrating strong growth and profitability. Manzil, an Islamic finance platform, has continued to scale its operations after a successful fundraising round, showing the potential of fintech to drive innovation in niche financial markets. Velox Trade, a fintech platform focused on providing trading solutions for high-frequency investors, has seen significant adoption and growth in recent years. Other standout Canadian fintechs include:
The Holt Xchange has a track record of 30 fintech investments across 10 countries, achieving 5x portfolio revenue growth. This success illustrates the sector’s potential and signals opportunities for investors who are willing to engage with early-stage companies. As Canada's fintech ecosystem continues to mature, these companies are just the beginning of what promises to be an exciting and lucrative market for investors.
A notable trend emerging in private markets is the "retailization" of alternatives, reflecting a significant shift in investment dynamics. In 2021, retail investors accounted for 52% of global assets under management (AUM), with projections indicating this figure will rise to over 61% by 20307. This shift is democratizing access to high-growth opportunities, including fintech investments, through platforms like FrontFundr.
The growing influence of retail investors is reshaping traditional investment landscapes, prompting financial institutions to adapt by offering more inclusive and flexible investment options. As this trend continues, platforms like FrontFundr are at the forefront, enabling individuals to invest in companies they believe in and contributing to the expansion of the fintech sector.
The fintech sector continues to thrive in the private markets and is increasingly capturing attention in the public sphere as well. Major players like Revolut, Monzo, and Klarna—all still privately held—are actively preparing for public listings. Klarna has formally filed for an IPO on the New York Stock Exchange, aiming to raise over $1 billion11. Monzo is targeting IPO readiness by the end of 2025, with internal debate over a UK versus US listing12. Revolut, meanwhile, has been building out its global operations and is widely expected to pursue a public offering, though it has not yet filed13. These movements reflect both the growing maturity of leading fintech companies and broader investor confidence in the sector's long-term trajectory.
Despite challenges such as elevated interest rates, private markets remain a vital arena for fintech investments. In 2024, global private equity and venture capital deal values surged by 24.7% to $639.02 billion, marking the first increase since 202114. This growth underscores sustained investor interest in fintech, driven by the sector's potential for long-term expansion.
As the market stabilizes, 2025 is projected to offer favorable conditions for fintech investors. Valuations, while recovering, remain below peak levels, presenting opportunities to invest in high-potential fintech ventures before anticipated public listings and market momentum drive valuations higher. Analysts suggest that the current environment may represent a buyer's market, enabling strategic investments ahead of expected valuation increases.
These developments highlight the dynamic nature of the fintech sector, with both private and public markets offering avenues for strategic investment as leading companies advance toward public offerings.
At FrontFundr, we’re playing a pivotal role in democratizing access to venture capital for both institutional and retail investors. As a fintech company ourselves, we understand the unique opportunities that platforms like ours provide for high-growth fintech startups. By leveraging equity crowdfunding, fintech companies are able to raise capital directly from a diverse group of investors, opening doors to funding that might have otherwise been out of reach.
For example, Manzil, an Islamic finance platform, successfully raised funds through FrontFundr, enabling them to scale their operations and achieve significant growth. Manzil is also part of The Holt Xchange’s portfolio, a key player in democratizing access to fintech opportunities. The Holt Xchange is inviting retail investors to participate in their fund, further enhancing accessibility to high-potential fintech investments. This collaboration is a prime example of how equity crowdfunding creates synergies between startups and investors, providing fintechs with the resources they need while giving investors the chance to back innovative companies. As Canadian fintechs continue to rise, platforms like FrontFundr and initiatives from The Holt Xchange remain essential in expanding access to capital and fueling innovation in the sector.
Revolut's trajectory from a modest startup to a fintech powerhouse exemplifies the transformative potential of equity crowdfunding for retail investors. In 2016, Revolut collaborated with Crowdcube to offer 2.4% of its equity, valuing the company at approximately $40 million9. This initiative attracted 433 investors, who collectively invested over $1 million, with an average individual contribution of £2,1529.
Fast forward to 2024, and Revolut's valuation has soared to $45 billion8. This exponential growth has yielded extraordinary returns for its early backers. Shares initially purchased at $2.14 each are now valued at $865.42, marking a 404-fold increase8. Consequently, an average investment of £2,309 has appreciated to over £900,0008.
In November 2024, Revolut facilitated a secondary share sale, allowing early investors and former employees to liquidate portions of their holdings. This move not only provided substantial financial gains for these stakeholders but also underscored the company's robust market position10.
Looking ahead, Revolut is contemplating an initial public offering (IPO), with industry insiders anticipating a public debut by 2026. The company is considering a U.S. listing to leverage greater market liquidity and favorable conditions.
Revolut's journey underscores the significant impact that equity crowdfunding can have, offering retail investors access to early-stage ventures with the potential for substantial returns. It also highlights the evolving landscape of fintech investments, where public participation is increasingly pivotal in driving innovation and growth.
While Canada’s private markets have yet to catch up with global benchmarks in terms of fintech investment, the sector itself offers tremendous growth potential. With emerging opportunities in both the private and public markets, investors looking to capitalize on the next wave of fintech innovation should explore platforms that provide access to high-potential startups.
As the Canadian market matures and adoption of fintech solutions accelerates, the sector’s long-term prospects remain strong.
