Pigeon expects continued interest in AI and ML in 2025 but anticipates investors will be more selective about where they allocate capital. “Investors have capital to deploy in Canadian fintech, but fintechs will need to have a very strong value proposition to get funding,” he says.
“The fintechs that can demonstrate an ability to solve a problem for financial institutions and their legacy technology, that can acquire and retain clients, and that report decent profits will be more attractive to investors,” he adds.
Cunningham agrees that investors will take a more selective approach in 2025 and expects fintech valuations to rise. She also identifies regulatory technology (regtech) as an emerging sector to watch, given the increasingly complex regulatory landscape.
“Canada’s fintech ecosystem will see a market shift towards regulatory tech and ESG in 2025,” she says.
“Other sub-segments such as neo-banks and insurtechs that continue to expand their product offerings will see growth as well. Overall, the market is well-positioned for strength this year, with valuations likely trending upward.”