Canadian Fintech: Mo Money Mo Problems 💳

Investment dealers become deals themselves. Yearning for yield. Halal finance.

Dec 12, 2022

Morning!

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💰 Funding

Yield Exchange won $110k in funding to help Canadian orgs (businesses, endowments, etc.) browse and negotiate GICs across multiple financial institutions (banks, trusts, CUs). Think of it as a marketplace between orgs (depositors) and FIs (GIC providers).
Buckzy Payments raised $19m to speed up cross border payment settlement. Buckzy has created a “real time network” of banks and e-wallets in multiple currencies around the world.
Blockstream, a bitcoin infrastructure company with multiple products, raised funding at a 70% lower valuation. The Victoria based fintech was valued at $4.3b in 2021.
Hubly, a workflow automation tool for financial advisors, raised a $2m extension round. Competitor Super Advisor raised the same amount last month.

🤝 M&A

Small business cyber insurance company BOXX acquired cyber threat alert startup Templarbit. The acquisition is part of the Toronto company’s strategy to expand beyond coverage products (provided via partnership with Lloyd’s of London) and into a suite of cyber risk management tools.
In not so surprising news, RBC acquired HSBC Canada for $13.5b. That’s 4k employees, 130 branches and 2% of Canadian deposits and mortgages at a 9.4x multiple on adjusted earnings of $1.4b. I wrote why RBC was the obvious choice here.
Investment dealers become deals themselves:
- The Canadian arm of investment dealer Raymond James has acquired Vancouver based Solus Trust, adding $200m in assets to RJ’s wealth management business.
- Canada’s largest financial co-op (credit union / caisse populaire) Desjadins acquired the investment dealer business of Guardian Capital Group for $750m, along with their mutual fund and insurance distribution network.

🚀 Product

Sharia compliant financial services provider Manzil, launched a halal actively managed investment product in partnership with embedded wealth management fintech, OneVest. Manzil already provides mortgages, cards and wills to Muslim Canadians. Wealthsimple launched a halal passive investment product in 2017.
Halifax based huumans, launched a subscription service that connects small businesses that use self-serve bookkeeping software (Xero, Quickbooks, etc.) with real life bookkeepers who provide reconciliation and payroll support. The fintech was founded by the team from Calgary based Wagepoint, a Canadian payroll software.
UK credit score monitoring app ClearScore, launched in Canada to compete against Borrowell and Credit Karma. ClearScore uses TransUnion to offer soft-checks, while Borrowell uses Equifax.
Payfare, an on-demand wages platform for gig workers on Uber, Doordash & Lyft hit 1m monthly active users.
Insurance broker NFP has partnered with Canada’s oldest pet insurance provider Petsecure. The news comes the same month as Fursure, a US “bank for pet-parents” raised $3m USD.
In other insurance news, fintech PolicyMe launched their second life product (critical illness coverage) underwritten by Canadian Premier. The fintech raised $18m this year.

Are you a loan originator looking for portfolio financing?

Meet Cypress Hills Partners, one of Canada’s leading funder of lenders:

Financed approximately $200m of loan receivables
Offering higher advance rate structures that allow lenders to reinvest more retained earnings into growth
Specialized in consumer, corporate trade, and other unique collateral pools

Interested in a custom-structured credit facility? Let’s chat!

⚖️ Policy

Finance Canada is conducting a consultation on crypto, stablecoins and CBDCs as part of review on the “digitalization of money”.
Lobby group Paytechs of Canada rebranded as Fintechs Canada to cast a wider net on non-bank regulatory issues.
Ron Morrow, the Executive Director of the Bank of Canada is urging fintechs that provide payment services to prepare themselves for regulation. The federal government tasked the BoC to oversee the Retail Payments Activities Act passed in 2021, which will require about 2500 fintechs to register themselves in 2024. At a conference last month Morrow said:

“As the Notorious B.I.G. so aptly said: It’s like the more money we come across, the more problems we see. There are new ways to pay and an abundance of new players in payments. When money changes hands electronically in these new and different ways, we all need to make sure that consumers and the payments ecosystem are protected.”

🎂 Number time!

46% - the percent drop in Vancouver area home sales from last year. This is a near historic low.
> 50% - the percent of Shopify’s revenues now coming from fintech (mostly payments and a bit of merchant financing).
27.9m - the number of Canadians that have an active credit product. This is a 7.9% YoY increase.
100% - the percent of Canadian employees abruptly let go at Koinly, a crypto tax prep fintech.

👀 Who’s hiring?

KOHO, Sr Product Manager Growth (Remote)
NorthOne, Product Manager Lending (Toronto)
Jobber, Director Fraud & Credit Risk (Edmonton)

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