With the presence of all of Canada’s major financial institutions and a supportive startup ecosystem — including incubators and a city government open to innovation — Toronto is well-known in Canada as a major FinTech startup hub. And one Toronto-based company, fresh off a $5 million Series A round, wants to add itself to the list of companies giving Toronto its strong FinTech reputation.
Flexiti Financial closed the $5 million with follow-on funding from Globalive Capital. Flexiti’s platform allows retailers to offer low or no-interest financing, convert big ticket purchases to monthly or deferred payment plans, and establish a dedicated line of credit by creating a virtual private label card — and promises to process the information and make a lending decision within three minutes.
“Canadian consumers and businesses are looking for alternative financing options tailored to their lifestyle or business needs, and we believe Flexiti Financial’s technology is uniquely positioned to capitalize on this growing market demand,” said Anthony Lacavera, chairman of Globalive Capital. “Flexiti Financial aligns with Globalive Capital’s core principle of finding companies and entrepreneurs that are breaking down barriers and challenging the status quo, and providing them with the resources they need to accelerate growth.”
The lending space for FinTechs is a crowded one, but Flexiti founder Peter Kalen believes that his company’s approach to providing financing options — which focuses on increasing sales for retailers — can separate it from the competition. Kalen is a veteran of the credit card and retail world, having spent time at TD Canada Trust and Citibank’s credit card division, where he was responsible for partnering with retailers like Petro Canada, Ikea, and Costco.
“Some of the bigger institutions we compete with have a credit card criteria and don’t go beyond that. We consider ourselves partners of retailers in an effort to help them grow their sales,” said Kalen. “So if we can’t make a decision on the spot with the information provided, we ask them to call us, and we have agents on standby who are there and available to facilitate the sale.”
Speed is also one of the most important aspects of Flexiti’s platform. Kalen gives the example of a hypothetical retail situation where a customer wants to buy a $1,000 washer and dryer, and the salesperson offers the customer a $2,000 set with more flexible financing options.
“I think we’re now in a position where we see really clear runway to accelerated growth and it’s all about execution now.”
“If the application process takes too long, the customer will say ‘I’ll just stick with my $1,000’. Or if the salesperson thinks the customer will get declined, they won’t want to offer financing unless the customer says ‘I really want that $2,000 washer and dryer, so let’s try.’ Without that combination of speed of application process and high approval rates, you don’t have the confidence of salespeople,” said Kalen.
Flexiti is using the funding to overhaul its back-end system and continue simplifying this process; Kalen said his team counts the number of clicks it takes to even get to an application, and determines if there are more seamless ways to get applications completed.
Currently, Flexiti’s platform is being used by 1,000 retailers across Canada. While the company was founded in 2013, Kalen said that the company has been mostly heads down working on operational kinks. It’s also part of the reason why the company is only now going through a major overhaul of its back-end; Flexiti launched early just to prove its business model, and worked on optimizing its front-end experience for merchants and ‘building the glue’ that connected its systems. Flexiti completed its first transaction after launch.
“That was the appropriate thing to do when we launched, as we have proven that business model does work and we want to take more control of our system,” said Kalen. “I think we’re now in a position where we see really clear runway to accelerated growth and it’s all about execution now. It’s no longer about tech risk, business risk, or funding risk. We have the tools in place to set ourselves up for executing and growing.”