Canadian Fintech: An open banking miracle 🎯
EQ inks a partnership with Berkeley. HonestDoor becomes a broker. Centro & Birdseye save e-comm.
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💰 Funding
Centro, a platform for e-commerce sellers to manage their inventory across multiple vendors and sales channels raised $2m.
On the topic of e-comm sellers… Birdseye, a marketing analytics platform for sending targeted sms and email offers, raised $4m.
Peloton, a Victoria based payments platform, raised $2m. The company received another $2m in funding from the federal gov earlier this year and also acquired a small ISO.
🚀 Product
CanTax.ai, an LLM trained on the Canadian tax code, launched a free online tax advisor.
EQ Bank is now a BIN sponsor for Berkeley Payments prepaid card programs. This means that Berkeley clients will be able to issue cards using EQ’s relationship with Mastercard.
EQ owned Concentra Bank is also the issuer for Neo Financial, which competes with Berkeley in some ways.
HonestDoor, an online property appraisal tool, launched its own brokerage. The company will offer a cheap way for property owners to list their homes on MLS without an agent.
This provides an affordable option somewhere in between a full service brokerage and For Sale By Owner (FSBO) at a time where major real estate brokerages have been accused of price fixing.
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⚖️ Policy
In their Fall Economic Statement, the federal government said that it will introduce legislation in Budget 2024 that establishes a “consumer driven banking” framework that will finally regulate access to financial data ie. open banking! 🥳
If you’re interested in reading all of the fintech highlights from the FES, I put a summary together here.
A new supervisory regime for payment service providers (PSPs) was introduced under the newly finalised Retail Payments Activities Act (RPAA).
📈 Stat of the week
73% - the drop in Canadian venture debt dollars this year.
Venture debt has consistently expanded as a debt funding option primarily to venture backed tech companies.
Funders like CIBC Innovation Banking, Espresso Capital, and SVB have created the market locally.
So why the drop?
A spike in interest rates and the SVB debacle have certainly contributed. But the finger pointing should really be directed to the lack of VC funding to the Canadian tech sector.
Venture debt is commonly tacked on top of a tech company’s equity raise, to extend runway without the dilution.
Venture capital dollars have dried up this year and so have venture debt.
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Have a great week! See ya 👋