Canadian Fintech: Why was Zafin acquired? 🏦
Goeasy doubles down on auto lending. Float's charge card explained. Dax is back!
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💰 Funding
Sibli, an AI tool for institutional investment research, raised $6m. The company launched in 2021 with a focus on ESG research use-cases.
Goeasy, a subprime consumer lender, is doubling down on automotive lending by increasing their securitization facility to $500m.
Float raised a $50m credit facility from SVB for their corporate charge card program. Wondering how that’s different from a credit card?
Payback period: Charge cards are paid back within the month, while credit cards can revolve balances month over month.
Interest: Since charge cards don’t revolve unpaid balances, they can’t charge interest.
Interchange: Charge cards are a bit less risky than credit cards, so issuers usually charge lower merchant fees.
🤝 M&A
Zafin, a pricing platform for banks, was acquired by private equity in a 9 figure deal. That’s pretty significant for a Canadian fintech. This acquisition plays into 3 enterprise banking trends:
Modernize > replace: Zafin’s pitch to banks has always been, we’ll help you modernize your core by hollowing it out, and moving the tricky stuff (pricing and product functionality) into a new system. The pitch works because banks rarely replace their cores.
Banks care about pricing again: Super low interest rates mixed with covid stimulus meant that banks didn’t need a pricing strategy to attract deposits. But in the last two years that has flipped completely and banks are clamouring for product pricing tools like Zafin to retain high quality customer deposits.
PE likes enterprise software: These businesses have great LTVs but super long sales cycles, making them perfect targets for well capitalized firms with long time horizons. Nomis, one of their largest competitors, was also scooped up by PE in 2020.
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🚀 Product
Aquanow, a Vancouver based crypto infra company that facilitates payments, trading, and custody has expanded to the UAE.
Impak Analytics, a Montreal based ESG rating agency partnered with BNY Mellon, the largest custody bank in the world.
Dax is back! Dax Dasilva, the founder of Lightspeed is once again in the CEO seat after a two year break. The payments company crushed it through Covid thanks to an increase in online shopping, but sharply tanked after a short seller report targeted the firm in 2022, leading to Dax’s departure.
Speaking of short selling, Fairfax Financial, an insurance holding company, is battling a report that they “manipulated asset values and income”.
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Have a great week! See ya 👋