We used the CB Insights’ database and platform tools to compile a market map of 84 notable Canadian fintech companies, as well as the 5 most active venture capital and corporate investors in Canadian fintech.
While deals and dollars slowed to Canadian startups in the first half of 2019, early-stage startup activity suggests that there’s more to the story.
On an annual basis, deals and dollars were down from previous highs. The first half of 2019 saw 240 venture rounds to Canadian startups, compared with 281 in H1’18. Total funding was also down year-over-year, hitting $1.7B in H1’19 versus $1.9B in H1’18.
At the same time, early-stage and late-stage trends paint a different picture. Seed deals accounted for a larger share of overall deals in H1’19, indicating growth among startups at earlier stages. And, at later stages, Lightspeed POS went public on the Toronto Stock Exchange in March, raising $240M and seeing its shares jump 26% on the company’s first day of trading.
Finally, looking at Canadian “fintech” (financial technology) specifically, funding was up substantially in the first half of the year. Canadian fintech companies raised $251M through the end of H1’19, nearly double the $133M raised in H1’18.
The 2019 Canadian fintech market map
The startups selected for inclusion in the market map below are all Canada-headquartered, VC-backed fintech companies that have at least US $1M in equity funding, and have obtained equity funding since the start of 2015. Included startups also have a CB Insights Mosaic score of at least 300. Mosaic is a quantitative framework that measures the overall health and growth potential of private companies.
Startups headquartered in Ontario dominate the table, with over 40 fintech companies from this market map headquartered in the Greater Toronto Area. Vancouver and Montreal come in second and third, respectively, with 25 fintech startups headquartered between the two.
We expect this cohort to evolve as new players emerge and others falter or exit. Data is as of 10/8/2019.
Click on the image to enlarge.
Navigating the Canadian fintech market map
All companies on this market map are fintech companies. Our definition of fintech includes (1) technology companies that provide services to the financial services industry, and/or (2) technology companies that create, distribute, and administer financial products themselves. Within fintech, we have identified 12 distinct subcategories, as well as an additional “other” subcategory.
Subcategories are mutually exclusive. This means that a given company falls into only one subcategory on the market map.
We subcategorize companies according to their primary line of business. A company’s primary line of business is implied by its current serviceable addressable market (SAM), management guidance, marketing materials, press releases, clientele, and/or partnership activity.
Our “investors” subcategory highlights the top five most active investors in Canadian fintech. Qualifying top five venture capital investors (e.g. venture capital, growth equity, and super angel) and corporates (e.g. corporations and corporate venture capital) must have made equity investments into fintech companies listed on this market map. The number of portfolio investments of each investor was evaluated, and in the event of a tie, investors with the higher number of equity investments were selected. In the event of a further tie, investors participating in the larger of total dollars invested were selected.
- Accounting and expense management. Companies in this subcategory (1) provide technology to accounting and tax, bookkeeping, and expense management players, or (2) leverage technology to provide these services directly to end-users. For instance, Bench Accounting (disclosed equity funding of US $44.22M) syncs with a company’s books and employs professional bookkeepers to provides tax-ready financial statements.
- Blockchain and crypto. Companies in this subcategory (1) provide blockchain technology to financial services players, or (2) leverage blockchain technology to provide financial products and services directly to end-users. This subcategory includes companies enabling the trading, storing, and/ or usage of cryptocurrencies, but excludes companies working on cryptoassets unrelated to financial services (e.g. “digital collectibles”). For example, KNØX Custody (disclosed equity funding of US $6.2M) provides insured cryptoasset and cryptocurrency custody solutions.
- Capital markets. Companies in this subcategory (1) provide technology to capital markets players to enable the augmentation or replacement of securities issuance, trading, and/or clearance and settlement processes, or (2) leverage technology to provide these services directly to end-users. Companies here range from alternative trading systems to financial modeling and analysis software. For instance, Overbond (disclosed equity funding of US $7.5M) provides cloud-based communication and analytics solutions for the bond market, allowing dealers and investors to connect with corporate and government issuers directly.
- Digital banking and financial infrastructure. Companies in this subcategory provide (1) white-labeled technology infrastructure to banking players, or (2) leverage technology to provide financial infrastructure and banking software (e.g. APIs) directly to end-users. For example, Flinks (disclosed equity funding of US $1.72M) is a financial data aggregator, providing APIs to enable fintech companies to connect with their users’ financial data.
- HR, payroll, and benefits. Companies in this subcategory (1) provide technology to employers to automate human resources, payroll, and benefits processes, or (2) leverage technology to provide these services directly to end-users. This subcategory includes companies providing all-in-one HR solutions, which include financial benefits, as well as companies providing financial benefits administration. For instance, Collage (disclosed equity funding of US $3.79M) is a cloud platform that automates HR and benefits for Canadian businesses, with solutions for employee records, group benefits, and payroll, among others.
- Insurance. Companies in this subcategory (1) provide technology to enable insurers across the value chain (underwriting, distribution, claims, etc.), or (2) leverage technology to provide P&C or life insurance products directly to end-users. For example, Goose Insurance (disclosed equity funding of US $1.73M) provides travel insurance for Canadian citizens. Notably, Goose’s app sends a reminder when it detects that a user is near an international airport or the US border.
- Lending. Companies in this subcategory (1) provide technology to enable lenders across the value chain (underwriting, monitoring, distribution, administration, etc.), or (2) leverage technology to provide lending products directly to end-users. This subcategory excludes companies providing mortgage and real estate loans, which are included under the “real estate” subcategory. For instance, FundThrough (disclosed equity funding of US $11.87M) provides small businesses with transparent financing and receivables factoring.
- Payments, billing, and money transfer. Companies in this subcategory (1) provide technology to merchants and financial services players to enable B2B (business-to-business), B2C (business-to-consumer), and P2P (peer-to-peer) payment flows, or (2) leverage technology to provide these services directly to end-users. For instance, Soundpays (disclosed equity funding of US $1.2M) uses inaudible sound waves to enable mobile devices to act as mobile wallets.
- Personal finance. Companies in this subcategory enable consumers to save money, track accounts, and invest. For example, Koho (disclosed equity funding of US $38.65M) provides Canadians with a mobile current account with an integrated app and reloadable Visa card, enabling real-time insights into a user’s finances.
- Real estate. Companies in this subcategory (1) provide technology to enable real estate players across the value chain (investing, managing, brokering, lending, leasing, etc.), or (2) leverage technology to provide real estate-focused products directly to end-users. For instance, RentMoola (disclosed equity funding of US $9.03M) is an online global payment network that allows residential tenants to pay rent, and condo owners to pay their condo fees, by credit card, debit card, or RM Direct Debit.
- Regulatory tech. Companies in this subcategory provide technology to enable businesses to meet compliance standards, ensure risk management protocols are in place, and set up controls to actively mitigate risk. Companies here complement existing compliance, audit, and risk workflows, and/or leverage technology to automate workflows. For example, Trulioo (disclosed equity funding of US $75.74M) is a global identity and business verification company that provides secure access to independent data sources worldwide to verify consumers and business entities online.
- Wealth management. Companies in this subcategory (1) provide technology to wealth management firms and advisors to enable full-service brokerage alternatives, improved lead generation, and/or automated and semi-automated investment advisory, or (2) leverage technology to provide these services directly to end-users. For instance, d1g1t (disclosed equity funding of US $9.1M) is a digital wealth management platform powered by analytics, which provides portfolio management services and risk reporting to advisors and their individual investors.
- Other. Companies in this category have (1) multiple primary lines of financial services-related business, or (2) are categorized as fintech, but do not fall into one of our other subcategories.