CB Insights: Canadian Fintech Funding Dropped 70 Percent in Q2-2022 YoY

Betakit | Charlize Alcaraz  | Jul 21, 2022

Though funding for Canadian FinTechs is down quarter-over-quarter, there is still a good amount of capital flowing into the sector—though it remains to be seen how the rest of the year will play out given the current turbulent economic and market conditions.  Canada’s FinTech sector has entered a cooling down period, relative to the amount of funding activity in the country last year. Even on the international stage however, Canada continues to see much lower deals by number and amount invested compared to other regions.

• While Canadian FinTech funding has already reached 58 percent of 2021’s annual total so far this year, Q2 2022 saw a dip in total deals and a dramatic dropoff in total funding according to CB Insights’ latest State of Fintech report.
• The report found that funding poured into Canadian FinTech companies in Q2 2022 has plummeted by 75 percent quarter-over-quarter, from $1.2 billion to $300 million.
• Early-stage companies saw 71 percent of the deals made in the first half of the year, followed by mid-stage businesses receiving 13 percent of that pot, with late-stage firms securing 7 percent.

See:  State of Venture Q2, 2022: Funding Decreases by 23% QoQ

• The amount of deals also decreased by 36 percent quarter-over-quarter. In total, there were 28 deals completed in the second quarter of 2022, down from the 44 deals made in Q1 and a five percent drop from Q2 2021.
• The amount of mergers and acquisition exits dropped to 7 in Q2 2022, a slight decrease from 10 M&A exits in the previous quarter. Canada only saw one SPAC and one IPOs each in this quarter, which is in line with the same period last year.

Who was funded?

• Calgary-based Neo Financial’s $185 million CAD Series C round in May was crowned the top equity deal in the quarter. That funding round also made Neo one of Canada’s latest and youngest unicorns, providing the two-year old FinTech startup with a more than a $1 billion valuation.
• Second to Neo is Toronto startup Delphia, which closed a $75.2 million CAD in Series A round in April. Delphia is followed by Vancouver company MeetAmi Innovations’ $29 million seed financing, as well as Toronto-based Pine’s $27 million CAD investment round.
• Other Canadian FinTech firms that have also raised a sizable amount of capital in the second quarter include VirgoCX, Altrio, Mash, Moves, Emma, and Uplinq.

See:  Hardbacon: Why we launched an equity crowdfunding campaign in the middle of a bear market

Fintech investors

• The country’s top FinTech investors for Q2 2022 were the Ontario Teachers’ Pension Plan and Portage Ventures, which tied with 4 deals. Intact Ventures and N49P followed, joined by Georgian Partners, Loyal VC, Luge Capital, Whitecap Venture Partners, and Xpand Capital.
• Among the other regions named in the report—United States, Asia, Europe, Africa, as well as Latin America and Caribbean—Canada had the second lowest number of FinTech deals in the quarter, beating only Australia.

Continue to the full article –> here

 

---

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada’s Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org