Canadian Fintech: Motusbank shuts down 🪦

Good morning! Welcome back to the Canadian Fintech Newsletter, an industry roundup for founders, operators and investors.

Every Monday we break down the hottest topics in the industry in under 3 minutes.

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💰 Funding

• Styx Intelligence, a Vancouver based cybersecurity firm focused on phishing and brand impersonation scams raised $2.7m from BDC, Framework, Top Down Ventures, and Sprout Fund.

  • Styx raised $1.6m in 2023.

  • The founders sold their last cyber startup, Integrity-Paahi Solutions to Deloitte in 2016.

• Sprout Family, a Toronto based fertility benefits platform for employers raised $1.7m from StandUp Ventures, Blue Collective, MaRS, The51 and Boon Fund.

  • This is the second Toronto startup in the fertility finance space to receive funding in the last six months. Flora raised $1.5m to provide fertility insurance to Canadians that don’t have coverage through their employer.

🤝 M&A

• Purpose Unlimited, a financial services firm run by Som Seif is acquiring Steadyhand, a Vancouver based low fee mutual fund with $1.3b in AUM.

  • Purpose is aiming to hit $100b in the next 5 years across their advisor services, small business lending, digital assets, pension and retirement planning businesses.

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• Executives from every Canadian bank

• Hundreds of Series A & B founders

• +1,000 meetings scheduled

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🚀 Product

• Motusbank, the digital bank owned by Meridian Credit Union, is shutting down.

  • Meridian will acquire most of Motusbank’s Ontario based loans. Coast Capital will acquire all other loans as well as all deposit accounts.

  • Motus launched in 2019 as a federal bank and at its peak served 16,000 clients.

  • For reference, the other Canadian FI owned digital banks like Simplii (CIBC owned) and Tangerine (Scotiabank owned) both have around 2m.

• Chexy, a tool to pay your rent with credit card, has expanded to tax remittance and bill payments.

• Addy, a fractional real estate investment platform, became an exempt market dealer.

  • Prior to this, they relied on third party dealers and a “crowdfunding exemption” to close transactions, which BC regulators took issue with. An EMD license allows Addy to offer more investment products and market them to investors.

• Canadian Tire is linking their Triangle Rewards program to RBC’s Avion loyalty program.

⚖️ Policy

• According to the Globe, ​the Canadian subsidiary of China's largest bank, ICBK tried launching a new Canadian payment processing system to compete with Moneris.

  • The goal of the project was to collect financial data from Chinese-Canadian consumers.

  • The plan ultimately fizzled due to the pandemic. ​

• Payments Canada announced that the technical build of the Real-Time Rail (RTR) system’s clearing and settlement component is 50% complete.

  • The RTR, which was first announced in 2015 was last scheduled to go live in 2022, but is now slated for testing in 2026.

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Have a great week! See ya 👋

-Tal Schwartz