Builders' Almanac 2021

Forecast 1: Fintech

What will Canadian Fintech Look Like in 2021?

Harvest Builders Staff

Trends, recommendations and forecasts going into the future of fintech

Almanac Focus: What will Canadian Fintech Look Like in 2021?


Commercial banking is the biggest industry by revenue in Canada.  A high degree of trust permeates the banking sector. This is a good thing for consumers, but it engenders the kind of complacency that leads to low innovation, inefficient processes, and fees. Meanwhile, strict regulations protect consumers without providing the flexibility to allow new players to empower consumers with greater access to financial services and improved customer experiences. 

Figure 1: There is a $50 billion banking profit pool in Canada. (Bain Analysis) 

Early-stage financial technology (“fintech”) companies face high barriers and lack the capital to spend years building a proof of concept that consumers can trust.

This is changing, however. As fintechs look for opportunities across the value chain and partner with legacy institutions to pursue them, they will have a better leg-up for overcoming those barriers to entry. Whether that’s creating more customer-friendly user experiences, transforming legacy risk adjudication methods like credit scores, or expanding access to traditionally high-net-worth financial services, 2021 offers countless opportunities for fintech innovators to flourish. 

In addition, Canadian financial wealth grew from approximately $2.5 trillion in 2007 to $4.5 trillion in 2017. This figure is expected to grow by 7.6 percent by 2026. 

In 2019, Calgary’s Solium Capital, a SaaS platform for companies to manage their employee stock options and cap tables, was acquired by Morgan Stanley (and renamed Shareworks) for approximately $1.1 billion. The Solium acquisition was one of Western Canada’s biggest tech acquisitions, setting the stage for more Prairie-based tech companies to compete on a global stage, and subsequently supercharging further investment into Canadian fintechs –- many of which being launched outside of Toronto, and from within the Prairies. 

Last year, Symend, the empathy-focused debt recovery company, raised $73 million in funding from Inovia and Telus Ventures. A few months later, payment technology platform Nuvei went public with a $700 million IPO. Meanwhile, Harvest’s own fintech portfolio company Neo Financial, raised $50 million with funding from Valar Ventures led by Peter Thiel’s Valar Ventures, Shopify CEO Tobi Lutke, Dragons’ Den star and investor Arlene Dickinson, Inovia Capital, and others, to reimagine everyday banking for millions of Canadians.  



  1. Create widely-accessible products instead of niching down. In the U.S., banking innovators can target niche markets and still access a total available market of tens of millions of consumers. In Canada, the market is significantly smaller. As a result, fintech founders must ensure there’s a product-market fit for enough people. Neo Financial, a Harvest portfolio company, has taken this approach by creating more rewarding and mobile-first products for Canadians, including its high-interest savings account and a no-annual fee cash back credit card. 
  2. Consider the entire value chain of banking services before developing a product. The finance sector has a number of value chains where inefficiencies and manual processes create higher fees and time delays. Entrepreneurs with experience in a space can dig into a specific value chain (e.g. KYC and account openings, mortgages), examine each link in that value chain, and build a business for it. In the wealthtech space, there are several areas ripe for improvement, such as better UX and adding in gamification, more personalized robo-advisors, affordable equity research services, and more when choosing which angle their business should take. 
  3. Build relationships with institutions. While it sounds counterintuitive to cozy up to the entities you’re trying to disrupt, Canadian fintechs should make friends with incumbents. Managed properly, this can create a win-win relationship. Incumbents know they need to innovate. Startups know they need some runway to build their product before generating revenue. An incumbent-disruptor relationship can help meet these goals. 

Watch out for

The wealthtech world is grabbing headlines across Canada, with Wealthsimple being an early entrant paving the way for more Canadian fintechs. Wealthsimple, who were recently valued at $1.5 billion, has opened doors for more innovative companies to enter the wealth and robo-advisory space, further democratizing investing for Canadians, especially in alternative assets, such as real-estate, infrastructure, and private equity.

In fact, the amount of Canadian wealth put in alternative investments is expected to grow from $3.4 billion to $100 billion in the coming years. By comparison, there is $700 billion worth of U.S. wealth invested in the $10.3 trillion of money placed in alternative investments worldwide. 

Harvest Builders Staff
Forecast 2: Proptech
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