Canada is surpassing the United States in the fintech sector. The changing status quo is quite evident from the scale of investments received by Canadian fintech startups compared to their counterparts in the United States.
It is reported that the Canadian fintech sector in 2016 received the highest amount of venture capital backed funds since the past two decades. The funds raised by Canadian blockchain and fintech companies is said to have increased by over 35% percent compared to last year’s numbers. A leading online publication states various sources of statistics to prove the point.
While Canada gets most of the venture capital funds, the same can’t be said about the United States as the country’s blockchain and fintech sector registered a 30% decline in funding during 2016 in comparison to previous year’s numbers. It is not just the United States; the situation is almost similar in other prominent financial powerhouses as well. Investments in the United Kingdom, amid the Brexit, has fallen by about 25% and Singapore by close to 65%.
Few reasons for the emergence of Canada as a strong fintech hub include the ease of creating and operating a startup in the country, great test market and infrastructure for financial services. The Canadian banking industry has been receptive towards blockchain technology and other fintech solutions as well. The country’s banking industry has started considering blockchain-based fintech solutions as enablers instead of disruptors. This has led to increasing collaborations between fintech startups and banking and financial institutions.
In addition, Canada is among a handful of countries having a favorable regulatory regime towards bitcoin and blockchain technologies. This gives the North American nation an edge over its neighboring United States.
Various multinational venture capital and investment firms have their eyes on Canadian fintech sector at the moment. California-based Lightspeed Venture Partners and Japan’s NTT Data Corp are few such investment firms. As Lightspeed Ventures continue to explore the possibility of investing in the country, NTT Data Corp is offering an opportunity for Canadian fintech startups in partnership with MaRS to expand their services to the Japanese market as well.
The increasing interest in blockchain technology and fintech solutions among global banking, financial and trading institutions can potentially push Canadian fintech ecosystem into the forefront of the blockchain revolution.
Ref: VentureBeat | TheGlobe&Mail | Image: Bigstock