Canadian Fintech: Spin it off 🤑

Apr 29, 2024

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First Nations Bank of Canada is raising $50m and doubling its loan book to $600m.
- Last week the federal gov also launched a $5b indigenous loan guarantee program in Budget 2024

Securian Canada sold off its loan origination software business called Valeyo, to Canadian private equity group Constellation Software. Why?
- Toronto based Valeyo historically serviced credit unions with two business lines - insurance and lending.
- Last year Valeyo merged with sister company Securian (fka Canadian Premier Life Insurance Company) who only wanted the insurance assets, making it a no-brainer to carve off the lending business and sell it.
- The transaction is strikingly similar to the Technicost deal last year, where Co-operators (an insurance company) sold off Technicost (an LOS) to League Data (a credit union focused software business).
Armilla AI, which provides insurance and security tools for AI modelling, spun off its security business and called it AutoAlign.
- Armilla raised $6m last month.

TD partnered with ApplyBoard, to let international students open GICs. Why?
- GICs are a way of proving to the federal government that you have enough funds to support yourself while studying at a Canadian university.
Pesa, a Toronto based remittance platform for West African countries has expanded to China.
Metro, the grocery store giant, pulled out of the Air Miles loyalty program and launched their own called Moi.
- BMO acquired Air Miles last year.
- Metro will pay a $20m penalty to Air Miles.

Budget 2024 is “exploring” measures that could change tax treatment of halal mortgages.
- What’s a halal mortgage? These allow Muslims to finance home purchases without paying interest to a lender, which is 'haram', or prohibited by Sharia Law.
- How do they work? The “lender” buys the property for you and either charges you rent until you fully own it, or sells it back to you at a higher price.
- Do these already exist in Canada? Yup, fintechs like Manzil & Eqraz as well as certain private lenders do.
Equifax is beginning to test the use of rental data in their credit scores.
- Equifax only recently began accepting rental payment data via partnerships with fintechs like FrontLobby, Borrowell, Chexy, Zenbase & others.
- Budget 2024 cited rent reporting as a way to help renters to build credit.
Open banking now has a home. The Financial Consumer Agency of Canada (FCAC) will oversee consumer directed finance and received $1m in funding (tbh that sounds like way too little) to support its expanded mandate.

Binance is facing a class action lawsuit in Ontario for allegedly selling crypto without proper registration. The crypto exchange pulled out of Canada last year.

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