Canadian Fintech: Insurance for AI 🚦
Payfac vs Processor. ATB issues first ever dividend. Shared-equity ups and downs.
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💰 Funding
Armilla raised $6m for gen AI warranties. It’s basically an insurance product that protects the users of AI models from damages caused by hallucinations, data leaks, and compliance issues.
For example, if a fintech used an AI vendor for loan underwriting, which the fintech later discovered was in violation of data privacy laws, the fintech would be covered.
Gen AI companies are starting to offer product insurance directly to customers. Toronto based Cohere announced that they will take responsibility for any legal settlements or judgements when a client is sued for IP infringements.
The takeaway: One of the biggest hurdles in adopting new technology is compliance risk. Insurance is a way of shifting some of that risk.
Clasp, an embedded health benefits platform founded by two Canadians, raised $2m.
American employers spend trillions on health benefits every year but administer them through legacy benefits and HR platforms leading to billing errors and loss of coverage. Clasp is solving this by creating the integration layer in between benefits providers and HR systems.
Helcim, a Calgary based payfac raised $27m. What’s the difference between payment processing and payment facilitating (payfac)?
Processors are middlemen that help move money from an issuing bank (customer account) to an acquiring bank (business account).
Facilitators simplify this process by allowing businesses to operate under the payfac’s master merchant account, so the business doesn’t need to worry about underwriting, chargebacks, or hitting a high minimum volume.
Elevated Signals, a Vancouver based ERP system for manufacturers, raised $8m.
The company originally launched in 2016 to service cannabis producers.
TOGETHER WITH PAAYS
Auto lending and mortgage businesses are on the verge of massive transformations.
Borrowers are demanding better and faster processes, lenders want more automation to speed up decision making and increase conversion, and all participants are increasingly exposed to the acceleration of Identity and Income fraud.
In an ideal world, lenders and originators can solve this by partnering with 10+ different vendors and integrating the same number of APIs.
But in the real world, infinite budgets and timelines don't exist.
What's the solution? Paays. One platform. One API.
🚀 Product
Ourboro, a shared equity lender for home down payments, crossed 100 investments.
CMHC has offered a similar program since 2019 but recently announced that it is ending due to poor uptake.
Finix, a cross border payment platform expanded into Canada.
ATB will issue its first ever dividend to its single shareholder… the government of Alberta.
Kraken, a crypto exchange, now offers staking in Canada.
Le Panier Bleu, the “Amazon for Quebec” finally shut down after spending $15m of provincial funds and being made fun of by me.
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Have a great week! See ya 👋