Canadian Fintech: Why lenders are becoming real-estate brokerages 🏡
When they go low, Float goes high. Q4 delists. Wonderfi is buying everyone.
Good morning! We just hit 8,000 subscribers 🍾 woohoo! If you enjoy this newsletter, please consider supporting it by upgrading to a paid subscription.
Are you a lender? Get a $100 gift card for speaking with Finley about their credit facility management software.
Was this forwarded to you? Become one of our 8,013 subscribers by clicking below.
💰 Funding
MPOWER, a lender to Canadian international students, crossed $300m in portfolio financing. This comes amid a 40% drop in Indian student enrollment at Canadian universities due to recent tensions between the two countries.
🤝 M&A
Q4 an investor relations platform has gone private in a $257m buyout to private equity. This is the 6th out of 20 tech companies that listed on the TSX from 2020-21 to delist.
Wonderfi acquired their 5th Canadian crypto exchange in 2 years, Calgary based Bitvo. Bitvo was nearly acquired by FTX last year, but the deal fell apart amid the US firm's bankruptcy.
Nuvei, a payment processor, acquired Australian competitor Till Payments for peanuts in a $42m transaction. The Ausy fintech was valued at over $300m earlier this year.
IN PARTNERSHIP WITH FINLEY
Managing credit facilities is a piece of 🍰
Hey there lender!
So, you raised debt capital - bravo! But are you able to access it when you need it?
That’s where Finley’s debt capital software comes in.
Finley simplifies your credit facility management - everything from streamlining funding requests to tracking covenant compliance.
CFOs use Finley to manage over $3b in debt capital with private credit lenders… and rest easy while doing it 😴.
Get a $100 gift card just for chatting with a Finley expert.
Don’t miss out! Register here.
🚀 Product
Dye & Durham, a legal tech company best known for their corporate registry databases, is considering selling off their Canadian payments business, which they acquired from TELUS in 2021 for $500m.
Homewise, an online mortgage broker launched their own real estate listing site. Competitor Pine made a similar move, with their acquisition of Properly. RBC also did this with OJO. Why are lenders doing this?
Owning more of the transaction: They can now take commissions from the property sale and the mortgage origination.
Reducing their cost of acquisition: Real estate brokers refer business to lenders. Lenders refer pre-approved homebuyers to real-estate brokers. It’s a never ending back scratching machine.
Float, a corporate spend management platform (and sponsor of this newsletter) launched Float Yield, a market leading 4% interest rate on cash balances. They do this by passing on more of their margin to their customers, a practice that banks optimise against.
⚖️ Policy
3 Canadian fintech interest groups wrote open letters to Finance Canada pleading for open banking progress.
It’s become expensive for the Ontario Securities Commision (OSC) to review licensing applications for crypto exchanges. So the Agency is introducing $49,000 in new fees to cover their costs, up from $7,000.
📈 Stat of the week
164%: the increase in GTA real estate agent commissions from 2010 to 2023.
That number is more than triple the rate of inflation for the period.
Which is odd considering that there are 40,000 TRREB agents in the GTA for only 5,000 monthly home sales.
An over supply of sellers usually means more competitive prices for consumers. However, the 4-5% commission rate for agents hasn’t budged.
For context, 2% is typical in the UK and Australia.
Some lawyers thought this was odd as well, which led to a class action case in 2021 alleging that large GTA real estate brokerages are price fixing.
Despite the industry’s best attempts to have the case dismissed, a federal court has given the greenlight for the class action to proceed 🍿
Raising money? Get your deck in front of hundreds of investors here.
Investing? I’ll send you curated fintech deals every week here.
Interested in sponsoring? Reply to this email.
Have a great week! See ya 👋