Canadian Fintech: Why Would Nesto Buy CMLS 🏠

Goeasy hits $4b. Zūm Rails gets into card issuing. EQ Bank invents new product.

Good morning! Welcome back to Canadian Fintech, a newsletter for founders, operators & investors. 

Was this forwarded to you? Become one of our 9,316 subscribers by clicking below.

---

💰 Funding

• Artemis, a data-cleaning tool that helps AI teams prep data sets before deploying their models, raised $2m. 

• Woveo, a rotating group savings platform, won $15k at the DMZ’s Black Innovation Summit. The fintech closed $2.3m back in December.

---

🤝 M&A

• Nesto, an online mortgage lender, is in talks to acquire CMLS, the 3rd largest non-bank mortgage lender in the country. Nesto is well funded and looking for top line growth. This deal gives it to them in several ways:

  • Channel growth: Earlier this year, Nesto partnered with brokerage M3 to start originating loans in the broker channel. CMLS will give them far more broker relationships. 

  • Product growth: CMLS specialises in commercial mortgages, and will help Nesto expand beyond residential. 

  • Portfolio growth: Last year Nesto started servicing Canada Life’s mortgage portfolio. I can see a similar scenario here where CMLS keeps originating under their brand, but gives Nesto servicing rights on its $46b in AUM.

• OpenText, a Waterloo based cybersecurity company acquired Pillr, a US based cyber threat detection tool.