Clients of Toronto-based Float Financial are starting to pinch pennies to cope with the effects of Canada’s trade war with the U.S.—and that’s good news for the startup.

There’s a simple reason why, said chief financial services officer Andrew Dale: “We save them a lot of money.” Float provides prepaid corporate credit cards and other financial products to small and medium-sized businesses. A subscription to the platform costs a lot less than the salaries of an in-house finance team that would be required to manage the same tasks, Dale said.

“You can redeploy those savings in your business and make your life a lot easier,” Dale said. 

“It’s, perhaps ironically, a natural fit for the time we’re in as a society.”

Canada’s relationship with the U.S. is in tatters as U.S. President Donald Trump’s trade war rages on. Optimism among small businesses is at a 25-year low, while economists forecast economic growth will slow to 0.7 per cent this year and next. But in the fintech world, there are reasons for cautious optimism.

Companies like Float are raising money from big name investors and valuations are on the rise. Even fintechs abroad have set their sights on cracking Canada’s famously concentrated banking industry. U.K. fintech Revolut spokesperson Daniel Smiertka said “Canada remains a potential market of interest” for the firm, but declined to comment on reports the firm is recruiting a Canadian CEO. Houston-based Zolve also announced plans to expand into Canada earlier this month, but did not respond to a request to provide more details. These developments mark a major shift from a post-pandemic fintech deep freeze that was even more punishing than ones suffered by other tech sectors.

Georges Pigeon, a partner in KPMG’s Canadian deal advisory practice, said that regardless of economic volatility, fintechs are increasingly seen as good partners to help companies find efficiencies by going digital.

“Will people necessarily reach out to fintechs today, tomorrow, or Monday because economic times are difficult? I don’t think so,” he said. “I think it’s a bigger theme. It’s one really around what can we do to improve our operations to make them more seamless,” said Pigeon. 

Asked if he thinks now is a good time to invest in Canadian fintechs, Jan Christopher Arp, founding managing partner of the fintech venture capital fund the Holt Xchange said “a great time, actually.” Arp said he believes the market overcorrected a few years back—2022 saw the aftermath of frothy pandemic stimulus-fuelled tech investing—and that valuations are set to rebound.

Regulatory developments in Canada are also helping, according to Arp. Canada now has oversight regimes for crypto-trading platforms and payments firms, and plans to launch open banking and real-time payments next year. Open banking would give fintechs a boost by granting them reliable access to banking data at a customer’s request to power applications like spending trackers and accounting software, while the Real-Time Rail will give fintechs direct access to a new piece of national payments infrastructure.

Those developments have come with new regulatory requirements. Nikil Chande, senior director for registration and enforcement with the Bank of Canada’s oversight regime for payment service providers, said in an email that supervision offers clarity to payments firms operating in Canada and helps their customers feel safe using them. “Both of these developments can certainly help attract investment and interest in the space,” he said.

Canadian fintech has been rebounding since 2024. Investment reached a record US$9.5 billion last year, up from US$1.1 billion the previous year, according to data from PitchBook compiled by KPMG. Fintech funding in the country outperformed the sector globally last year, which saw investment drop, and also surpassed other tech sectors in Canada that continue to have difficulty raising funds, such as cleantech.

In January, Float announced a $70-million Series B led by Goldman Sachs’s growth equity arm. The round pushed Float’s valuation about 30 per cent higher than the US$150 million it was valued at following a US$30 million Series A led by Tiger Global in 2021. Fellow Toronto-based fintechs Venn and Loop, as well as Wealthsimple and Koho, have also announced significant fundraises in recent months.

Dale, head of financial services at Float, said international firms looking to enter the Canadian market will struggle if they don’t take the time to understand it. What look like friendly regulations could end up landing a firm in trouble if it doesn’t take the time to understand Canada’s complex web of compliance requirements, he said.

“You can grow quickly in Canada, but you have to be deeply embedded,” he said. “Is this time different? I think it depends on their degree of investment.”