The rules of FinTech fundraising have changed and founders need to adapt fast.
At Elevate Festival 2025, Laviva Mazhar, Principal at Luge Capital, and Cato Pastoll, CEO of Loop Financial, sat down for a candid conversation about what it really takes to raise capital in today’s market. Here’s what every FinTech founder needs to know.
The New Reality: Bigger Rounds, Higher Bars
Canadian FinTech founders raised C$2.24 billion across 60 deals in the first half of 2025, but don’t let that number fool you into thinking it’s all good news. The fundraising landscape has fundamentally shifted.
Early-stage rounds are getting bigger. According to CB Insights data, median early-stage FinTech funding has jumped from $2 million in 2023 to $3.3 million today. The reason is clear: the Series A milestone has moved from $1-2 million in annual recurring revenue to $3 million, forcing seed-stage founders to raise more capital upfront just to reach the next milestone.
Speed matters more than ever. Gen AI and FinTech infrastructure tools have made it dramatically easier to build and launch products. Some companies are now hitting $2 million ARR within their first 12 months. This creates intense pressure. Founders must execute faster or risk getting left behind.
What Investors Are Actually Looking For
Mazhar outlined three non-negotiables for attracting capital today:
First, uniqueness matters. The most obvious FinTech problems have been solved. Investors want to see unique problem-solution fit that still presents a path to large outcomes.
Second, defensibility is critical. With new tools making it easier than ever to launch products, how do you build something competitors can’t replicate? Your edge could be in technology, go-to-market strategy, or unique distribution channels.
Third, team calibre has never been more important. The first generation of FinTech scale-ups has created strong operators who are now launching their own ventures. Investors are particularly attracted to founders who’ve operated in regulated spaces before.
The Pivot That Saved Loop Financial
Pastoll’s journey with Loop Financial illustrates the resilience required in FinTech. The company started 10 years ago as a lending platform but faced brutal challenges during the pandemic. Rather than give up, they pivoted entirely. They took two years to reset and relaunch with new products focused on business banking and global payments.
The key was staying anchored to their core mission of helping small businesses succeed, even when the path forward wasn’t clear.
Growth Has Changed, And That’s Healthy
Both the investor and the founder agreed that the “growth at all costs” mentality is dead.
Today’s successful companies focus on cost optimization, profitability, and sustainability alongside growth. Pastoll noted that Loop’s thousands of small business customers are increasingly focused on metrics beyond revenue. Things like foreign exchange savings can add 5% to the bottom line.
The global mindset has also shifted. More founders are launching with international customers, suppliers, and employees from day one. This fundamentally changes how they think about capitalization and growth.
Where the Smart Money Is Going
Mazhar highlighted several areas attracting investor attention:
Office of the CFO. This includes AI-driven planning, back-office automation, and vertical finance solutions for specific industries.
Wealth transfer. Retirement and estate planning tools are gaining traction, especially through financial advisor channels.
Alternative assets. Infrastructure that enables everyday investors to access private equity and other alternatives represents a major opportunity.
Know Your Agent. Identity and access management for AI agents in the workforce is an emerging area of interest.
The Opportunity Ahead
Despite the hype around gen AI, FinTech remains one of the most attractive sectors for investors. Financial services are one of the largest GDP contributors globally and the opportunities are far from exhausted.
For founders, the message is clear: the bar is higher, but the toolkit is better. Those who can demonstrate unique solutions, build defensible businesses, and execute with speed while maintaining capital efficiency will find eager investors.
As Pastoll put it: “There’s never been a better time to start a company.” The question is whether you can meet the moment.
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Join us at CIX Summit 2026, in order to connect with fellow startup founders, investors looking for deal flow, and advisors who have been on the journey before.
CIX, powered by Elevate, is Canada’s largest startup awards program that brings together Canada’s most promising tech founders, global investors, and industry advisors to power new deals. Buy tickets at the Early Bird price before February 26, 2026: https://cixsummit.com/tickets/
