Canadian Fintech: Pension Fund Fail 🤦

FTX comes to Canada. RBC opens door to open banking. Fintech layoffs.

Jun 27, 2022

Morning!

Welcome back to Canadian Fintech, an industry recap… with memes! Last week we hit 5k subscribers 🍾 If you're reading this and haven't subscribed, you can join them by clicking below. Thanks!

💰 Funding

Cyber security startup Flare Systems, raised $9.5m to help enterprises monitor the dark web for leaked sensitive information like login credentials.
CapIntel, a sales platform that allows wealth management firms to create automated client presentations raised $14m. I wrote about similar advisor sales tools Fortuna, PureFacts, and AdvisorStream here.
Calgary based PayShepherd closed $3.8m to help heavy industry facilities (mining, shipbuilding, power generation, etc.) pay their contractors and avoid billing mistakes.
Altrio, a deal management software for real estate investment firms, locked down $8m. The company manages $1 trillion in real estate assets on its platform.
Plobal secured $8.5m to help Shopify merchants (Steve Madden, Forever 21, etc.) create mobile shopping apps. Brands launching shopping apps are looking to create loyalty and engagement in between purchases.

🤝 Acquisitions

Crypto exchange (and sponsor of literally every sporting event) FTX is entering Canada with its acquisition of Alberta based Bitvo. Bitvo is licensed to operate in every province in Canada. Binance also announced plans to return to Ontario this month.
Empire Company (which owns Sobeys), is acquiring a stake in Scene+ as part of a strategy to better compete with industry leader PC Optimum (owned by Loblaw Co). Scotiabank & Cineplex are the other owners of Scene+.
Cboe, a global capital market infrastructure provider acquired Canadian securities exchange NEO. This is Cboe’s second Canadian acquisition after buying MATCHNow, an equity ATS & dark pool in 2020.
Fairstone is officially renaming itself Fairstone Bank after its merger with Duo. I wrote about the very confusing history of Fairstone here.
Finn, a Vancouver based AI chatbot for banks was acquired by global customer service platform Glia. Finn operates in the same chatbot market as Canadian unicorn Ada.

🚀 Product

Plaid, a major financial data aggregator, has negotiated a direct API access connection with a Canadian bank - RBC. Historically fintechs using consumer permissioned financial data (for things like KYC or transaction info for underwriting) have relied on intermediaries like Plaid to collect this data using “screen scraping”, a method that partially circumvents banks and one that most Canadian banks have historically pushed back against.
Dello's crypto payments app was integrated into PandaPay's POS terminals. This is the first time Canadian merchants will be able to accept crypto alongside standard credit & debit cards within the same transaction flow.
Nuula, a small business health platform has launched credit products through partnerships with 3rd party Canadian fintechs. Business owners will now be able to get loans (via Merchant Growth) and corporate cards (via Caary). I wrote about Nuula’s past partnerships here.
POS lender Flexiti has crossed the $2 billion mark in loan originations. That is a 100% increase in the last year. For context goeasy, a major Canadian subprime lender, originated 1/4 of that last Quarter alone.
Global Predictions, a fintech that allows investors to sync multiple brokerage accounts and receive investment recommendations across their entire portfolio, has launched in Canada.

⚖️ Policy

An inquiry into money laundering in B.C. found billions of dollars in criminal money flowed through the province. The report blasted AML watchdog, FINTRAC and has triggered a federal government review of the agency.
Quebec’s Bill 96, adopted last month, requires businesses with 25 employees or more to make French the main language used in the workplace. Canadian business leaders unsuccessfully opposed the bill saying that it will make tech companies less competitive on a global stage.

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Canadian crypto funding: the good, the bad, and the ugly

This month the crypto world was rocked by Celsius, a major crypto lender that halted withdrawals on its platform, citing extreme market volatility and a collapse in crypto prices. The distressed lender with $8 billion in loans and $12 billion in assets under management is now the target of a Goldman Sachs acquisition.

What’s the Canadian angle here? Canada’s second largest pension fund, CDPQ invested $150m in Celsius’ Series B.

Understandably, this headline sucked most of the oxygen out of the room this month, but it’s not all bad news coming out of Canadian crypto. Here are three exciting announcements you may have missed:

Vybe Network raised $13m for its data infrastructure platform on the Solana Blockchain.
Virgo Group put together a $10m round and announced that its crypto exchange has been registered as a restricted dealer for crypto assets by the Canadian Securities Administrators, joining peers like Wealthsimple and Netcoins.
Mash raised $7.5m to create a bitcoin payments platform for online creators.

🎂 It’s number time!

13% the percent of employees let go from Wealthsimple this month.
$154,000 the amount the average Canadian homebuyer now needs in annual income to afford a typical home.
$20,744 the amount of non-mortgage debt the average Canadian has.