Canadian Fintech: Banking as a Service 🏦
Uber launches a Canadian banking app. Novacap's investment track record. Bloom creates a card for seniors.
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💰 Funding
Synctera, a platform that helps sponsor banks launch “Banking as a Service”, raised $25m. The company was founded in Canada but only went live to Canadian customers (banks & fintechs) this year.
This bucks a trend of negative headlines for the Baas industry. US regulators have come down on sponsor banks for implementing Baas partnerships that put them at arms length from their end customers.
What does this mean for Canada? Canadian banks & regulators have the opportunity to learn from the ups and downs of Baas in the US. We have a fraction of the number of sponsor banks, but we are trending in that direction.
Contractor management software is piping hot:
PayShepherd, a Calgary based workforce management tool, raised $7m. The company helps heavy equipment industries onboard and manage their vendors, who are typically contractors working on massive projects.
Ontraccr, a Vancouver based platform for managing construction projects (contractors, inventory & equipment) raised $1.2m.
SumoQuote, a Calgary based platform for roofing contractors to prepare client quotes was acquired last month.
🤝 M&A
AGA Benefit Solutions, a Montreal based group benefits administrator was acquired by private equity group TA Associates.
AGA was previously acquired by Canadian private equity shop Novacap in 2020. Novacap also owns RateHub, the popular rate comparison site and mortgage lender.
Plusgrade, a tool for purchasing travel add-ons at checkout (seat-upgrades, early boarding, etc.) was acquired by private equity group General Atlantic, valuing the company at over $2b.
Plusgrade’s embedded checkout experience is very similar to another Montreal fintech - Hopper. Both upsell travellers on ancillary travel products at the point of sale, just in the case of Hopper it’s mostly insurance.
Plusgrade has more than doubled in value in the last three years due to the post-covid travel rebound. This led to the company acquiring Canadian loyalty program points.com two years ago for over $500m.
Final fun fact: Plusgrade was also previously owned in part by Novacap, who bought their stake from… TA Associates. Notice a pattern here?
TOGETHER WITH PAAYS
Affordability is now a major issue for many Canadian consumers struggling to make ends meet.
And with these affordability challenges, comes the increasing occurrence of 1st-party fraud in auto and mortgage lending, in the form of falsified income and financial statements.
We built Paays Income Verifier to help auto and mortgage participants verify a customer's income and employment, enable a better digital experience, and speed up the income verification process for faster decisioning.
Better, safer, faster income verification with Paays Income Verifier.
🚀 Product
Argo, a marketplace for 24/7 gold trading was launched in Toronto. The company is backed by billionaire mining investor Eric Sprott.
The most common way for investors to purchase fractional shares in gold is through ETFs, which can be traded on stock exchanges.
Bloom, a reverse mortgage lender, launched a card product. This allows seniors to make everyday purchases up to a monthly limit secured against the equity in their home. The balance does not need to be repaid until the card holder passes away.
Payfare has partnered with Uber to launch a banking app for Canadian drivers. The card provides relevant perks like cashback on gas / EV charging and early access to wages.
Toronto based company Moves provides a similar product directly to drivers, instead of in partnership with the gig-platform.
TD has partnered with fintech Sidedrawer to build a financial data sharing platform for internal employees and their customers.
Fundica, a white-label marketplace for business funding (grants, credits, loans, etc.) has partnered with Visa.
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Have a great week! See ya 👋