Canadian Fintech: Banks crave loyalty 🫶
Canada has a new large Credit Union. SVB's impact on Canada. Social investing.
Morning!
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💰 Funding
Obsiido a retail alternative investment platform raised $800k. “Alts” like private equity and private credit are typically only available to high net worth individuals.
Pineapple, an online mortgage broker, has filed for a $25m IPO on the Nasdaq. The fintech competes with Homewise, Perch & Wiseday.
Synctera, a banking-as-a-service (BaaS) platform raised $15m and officially entered Canada. What is BaaS? Think of Synctera as a matchmaker between:
Banks - interested in renting out their charters
Fintechs - interested in launching products that require a charter (cdic, credit cards, debit cards, etc.)
Barley, an employee compensation management platform, raised $4m. The startup helps employers create salary bands, monitor for pay equity, and run compensation reviews.
🤝 M&A
BMO is acquiring Air Miles. The loyalty program has 10m active accounts. Banks love their rewards programs:
Investment dealer Echelon, a major player in the specialty finance space, is merging with PI Financial.
connectFirst and Servus Credit Union are merging. The new FI will have $31b in assets under management making it roughly the same size as Meridian.
🚀 Product
Blossom Social, a social stock trading platform, crossed 10k users.
Turbotax has partnered with Neo Financial to offer up to 80% cash advances on tax refunds.
Requity Homes, a fintech that buys your dream home and rents it back to you until you’ve saved for a down payment, will start reporting your rent payments to the credit bureaus. Rent reporting is provided by Front Lobby. This partnership makes too much sense ❤️.
Billi Labs, a personal finance management app now lets users track the carbon footprint of their spending. Carbon data is provided by Doconomy.
Flinks, a financial data aggregator, is launching new data science features for underwriters. Lenders can now select custom attributes in a borrower’s transaction history (stop payment fees, overdrafts, etc.) and test out new rules that help assess credit quality.
Canada’s largest bank tech meetup 🤝
Are you a fintech partnering with banks? Get your ticket for the largest bank tech networking event in the country.
Connect with bank execs from BMO, EQ, RBC, Peoples & more!
Tickets go up in price on March 31st. Get yours here!
🏦 How SVB impacts Canada
Last week one of the largest bank lenders to technology companies failed. Here are the potential Canadian knock on effects of the Silicon Valley Bank saga:
Less access to capital: SVB was one of the few Canadian lenders that understood tech. Without them, Canadian venture backed businesses will have materially less access to tech lending.
Less pressure on banks to innovate: SVB did not hold deposits for Canadian tech companies, but their work in the US pushed banks like RBCx to offer tech focused banking products.
Slow rolling competition policy reform: in the wake of 2008, pundits pointed to Canada’s bank concentration as an asset in weathering the global financial crisis. Similar arguments are being made today on the values of bank oligopolies - at the expense of more innovative and affordable financial services. I’m not holding my breath for open banking or payments modernization to make headway this year.
🎂 Number time!
30 - the number of Canadian businesses on the FTX bankruptcy creditor list, including OTPP, 1Password, and Nuvei.
65% - the percent of CERB payments that went to ineligible recipients in a recent CRA audit.
19.9% - year over year increase in credit participation in Canadian Gen Z. See the full breakdown from TransUnion below.
Have a great week! See ya 👋