Canadian Fintech: Not down with down payments 🏠
Embed fintech into everything. I'll take some insurance with that. Clearco comes home.
Morning!
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💰 Funding
Shopify invested $100m into Mailchimp competitor Klaviyo. Shopify previously invested in Vancouver bookkeeping platform Bench, payment giant Stripe, and BNPL Affirm.
Surebright raised $3m to help merchants embed insurance and warranties into their products at checkout. Duuo offers a similar embedded experience for landlords to offer renters insurance.
Qui Identity raised $6.5m to help businesses and individuals exchange verified identity information for things like KYC. Founded by the same team as Wave, an accounting platform that sold to H&R Block for $500m in 2019.
VendorPM a marketplace connecting building managers with vendors (cleaning, landscaping, etc.) locked in $20m.
Connect&Go a ticketing & payment system for festivals and amusement parks raised $17m.
🤝 Acquisitions
Clearco has sold off its overseas business to a competing revenue-based financing firm, less than a year after entering the market.
Givex, a Canadian payments and loyalty company made its 9th acquisition since 2014. The company went public last year.
WonderFi, a rollup of several crypto exchanges, acquired Blockchain Foundry, a maker of infrastructure for digital assets & NFTs for $12m.
LifeWorks (formerly Morneau Shepell), a provider of employee health and financial benefits was acquired by Telus for $2.3b.
🚀 Product
Sleek, a browser extension that saves your payment details for faster checkout launched with over 1k retailers.
Balance, a crypto custodian that competes with Brane and Tetra, now allows clients to stake their crypto in order to collect a yield on their digital assets. Balance hit $500m in assets this summer.
AlphaBlock, an automated investment manager, launched “pay for alpha”, replacing all management fees with a performance fee.
OTT Pay, a payments aggregator that lets Canadian businesses receive foreign currency from Chinese consumers, has rolled out services (Alipay, WeChat Pay and UnionPay) at university campuses across the country.
🫶 Partnerships
Health & dental benefits platform Rise People is adding financial investing as its newest employee benefit. Employers will be able to offer their staff professionally managed portfolios through OneVest.
Small business monitoring app Nuula will begin offering business owners life insurance policies through a partnership with Walnut.
Users of Canoo, an app for newly landed Canadian immigrants will now be able to report their on-time rent payments to the credit bureaus through a partnership with Billi.
In partnership with NETSOL
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🏠 CMHC is not down with down payments
CMHC is introducing a $200m “rent-to-own” housing program to incentivize developers to help low income Canadians find a path to homeownership.
What is rent-to-own?
A way of purchasing a property, where the buyer starts out as a renter, dedicating a portion of their monthly rent payment to building equity in the property.
How is this different to a mortgage?
Here a buyer receives a loan to purchase the property. But qualifying usually requires making a down payment of 5-20%.
With Canadian home values up 20% YoY and salary gains reduced by inflation, saving for a 20% down payment is out of reach for many first time buyers.
But CMHC is late to the party. Canadian fintechs are already tackling the first time buyer affordability issue:
Key & Requity Homes - are existing rent-to-own fintechs.
Ourboro - coinvests in your down payment up to $250k and is paid back when you sell.
🎂 Number time!
300 bps - the Bank of Canada’s cumulative rate hikes since March.
25% - the amount home prices could drop over the next two quarters according to TD.
$2.3 trillion - total Canadian consumer debt. $591 billion of which is non-mortgage debt (see graph).
👀 Who’s hiring?
Wealthsimple, Lead Credit Strategy & Policy (Toronto)
Equitable Bank, Commercial Underwriting Manager (Toronto)
JPMorgan, Head of Payments Strategy (North York)
Coinbase, Country Director (Remote)
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👋 Tal