Canadian Fintech: First National Scooped 🍦

Good morning! Welcome back to the Canadian Fintech Newsletter, an industry roundup for founders, operators and investors that takes 3 minutes to read.

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💰 Funding

• Common Wealth Retirement, a Toronto based group retirement platform for small businesses raised $15m in debt from Flow Capital.

• Ceedar, a Victoria based bookkeeping automation platform, raised $275k led by Metalab Ventures.

• Blue J, a Toronto based AI platform for law firms raised $167m at a USD $300m valuation led by Sapphire Ventures and Oak HC/FT,

• Cavelo, a Waterloo based cybersecurity firm focused on managed service providers (MSPs) raised $5m from Inovia Capital.

🤝 M&A

• iA Financialacquired RF Capital, a Winnipeg based high net worth advisor for $600m.

  • The deal makes iA one of the largest independent wealth advisors in Canada. RF had $40b in AUM and 189 advisors.

  • It also continues a trend of industry consolidation. Last month BMO made a similar acquisition, buying Burgundy Asset Management for $625m.

  • Wellington-Altus up next?

• First National, one of Canada’s largest non-bank mortgage lenders, is being sold to private equity for $2.9b.

  • First National is known for its balance sheet light model. They originate mortgages and then sell most of them to institutional investors, making fees along the way. It’s what makes First National an incredibly collaborative player in the industry.

  • I always thought at some point we’d see a megamerger between Stephen Smith’s holdings: First National, EQ and Fairstone - creating a viable competitor to the big 5.

  • Stephen Smith and his partner Moray Tawse will hold on to 19% of the company each and the remainder will go to Brookfield and Birch Hill, so there will continue to be strong partnerships between the institutions.

  • Smith merged Fairstone and Home Trust earlier this year for $6b.

• Dye & Durham, a Toronto based legal tech company best known for their corporate registry databases is finally considering a sale after months of infighting between the board and the ousted ex-CEO.

🚀 Product

• NDAX, a Calgary based crypto exchange partnered with MeetAmi, a Vancouver based platform for wealth advisors to get their clients into crypto.

• Money Mart, a subprime consumer lender, launched international payments via MoneyGram.

  • Last year they partnered with Koodo, to put prepaid phone plans in all of their Canadian locations.

• Propra, a Calgary based property management software (accounting, maintenance requests, tenant communication) partnered with Century 21, to power their Canadian property management division.

• Wealthsimple now allows customers to borrow money to invest using their investment portfolio as collateral in their registered accounts.

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Have a great week! See ya 👋

-Tal Schwartz