Canadian Fintech: Another Bank Acquisition 🏦
Wealthsimple hits milestone. Remember Kik? Manulife backtracks.
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💰 Funding
Code, a micro payments platform (example: selling a recipe online for 5 cents), raised $6.5m. Though this is technically seed funding, the company has been around in some way for 14 years. Here’s the history:
2010: Kik a mobile messaging app launched to compete with Whatsapp & Facebook Messenger.
2017: After losing the mobile app race, Kik pivoted to launch Kin, a cryptocurrency that could be used within the messaging app. To do this, Kin launched a US $100m initial coin offering (ICO). The highest profile at the time.
2019: The SEC sued Kik over the Kin ICO, claiming that it was a security not a currency. Later that year Kik’s messaging app was sold off.
2023: The team launched Code to let anyone online transact using Kin.
OpenHouse, a marketing analytics tool for homebuilders raised $1.5m.
🤝 M&A
Anthony Lacavera, the founder of Freedom Mobile (fka Wind Mobile) is leading a bid to acquire Wealth One Bank, a schedule 1 bank established in 2016, which caters to Chinese-Canadian clients.
Wealth One is relatively small ($600m in assets), unprofitable, and has been under regulatory scrutiny for AML violations and alleged connections between its founders and the Chinese government.
The irony is that Lacavera’s previous company Wind Mobile, was also the target of regulatory scrutiny for running afoul of Canada’s ownership rules. His largest investor was an Egyptian billionaire.
myHSA, a tool for advisors to facilitate Health Spending Accounts was acquired by People Corporation, a group benefits provider. Both companies are based in the Prairies.
SterlingCard, a POS and loyalty card provider was acquired by Payroc, an international merchant acquirer / processor.
IN PARTNERSHIP WITH THE BANKERS SUMMIT
🚀 Product
Canadian Mortgage App, a whitelabel app for brokers to provide cost estimates to their clients crossed 1m users.
Pineapple, a mortgage brokerage, has expanded into Alberta. The company went public on the NYSE last year.
Wealthsimple’s alternative asset funds (private equity, private credit & venture capital) have crossed $200m. All three funds were launched last year.
Manulife has backtracked on a proposed deal with Loblaw that gives their pharmacies exclusive access to fill specialty prescriptions for chronic illnesses covered by the insurer.
Manulife said that specialty drugs for rare diseases represent <1% of customers but have an outsized cost, which brings up costs for all customers. They then argued that having pharmacies compete for their exclusive business would balance out the cost of servicing this segment.
Pharmacy exclusives with insurance companies is a common practice in the US.
⚖️ Policy
21 major Canadian crypto firms have sent a joint letter to the Canadian Securities Administration (CSA) to rethink their stance on stablecoins being securities. The letter comes less than two months away from the CSA’s deadline to comply with their guidance.
👀 Who’s hiring?
EQ Bank (Group Product Manager) - Toronto
Affirm (Product Marketing) - Regina
Payments Canada (Retail Payment Systems Operator) - Remote
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Have a great week! See ya 👋