Montréal-based online mortgage lender Nesto has entered into a partnership with M3 Mortgage Group that will see its platform become available to over 8,500 brokers in M3’s network.
The partnership adds a B2B2C component to Nesto’s offering, and follows shortly after its takeover of Canada Life’s mortgages portfolio as the insurance company exited the residential mortgage space in December 2023.
“To further deliver our mission at scale, we want to distribute Nesto mortgages via the channels that are most attractive to Canadians,” Nesto co-founder and CEO Malik Yacoubi said in a statement speaking to the partnership with M3 Group.
While Nesto’s co-founder and principal broker Chase Belair said Nesto has always partnered with brokers, this partnership allows M3 Group’s mortgage brokers to directly submit their borrowers’ mortgage application to Nesto for financing.
Nesto’s Chase Belair described joining the broker channel as a necessary step to scale its experience to more Canadians.
Nesto was founded as a digital direct-to-consumer mortgage lender in 2018 by Yacoubi, Belair, CTO Karim Benabdallah, and COO Damien Charbonneau. The startup began its foray into B2B partnerships after raising $80 million CAD in Series C funding in December 2022, when it launched Nesto Mortgage Cloud.
According to Nesto, the offering provided Nesto’s mortgage platform to financial institutions, which the startup said would broaden its customer base and revenue streams. The product’s first customer was Series C round leader IGM Financial.
Nesto is now available to M3 Group’s broker network, which includes brands such as Multi-Prêts, Mortgage Alliance, Mortgage Intelligence, Invis Mortgage Solutions, and Verico, Nesto. Nesto’s mortgage platform will become available to brokers progressively, Belair told BetaKit, with the first cohort of brokerages gaining access in Q1 2024.
Belair added that the number of Canadians seeking mortgage brokers for advice continues to grow, and that joining the broker channel is a necessary step for Nesto to scale its experience to more Canadians.
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Results from a Mortgage Professionals Canada survey released in March 2023 found that 45 percent of first-time home buyers were most likely to use the services of a mortgage broker, as well as 40 percent of those between the ages of 18 and 34.
“This partnership was a natural fit with our broker-first mentality, coupled with [Nesto’s] passion for helping customers seamlessly achieve the dream of home ownership with market-leading rate offerings,” M3 Group chairman and CEO Luc Bernard in a statement.
In June 2023, BMO identified a similar gap and announced its intent to enter the broker channel in early 2024 by launching its new BrokerEdge offering. In a statement announcing the launch, BMO cited a 2023 Canada Mortgage and Housing Corporation survey, which claimed 43 percent of recent mortgage consumers relied on a mortgage broker to manage their mortgage negotiations.
In November 2023, Deloitte named Nesto to its Fast 50 list, where it earned seventh place with a three-year revenue growth rate of 2,186 percent.
Feature image courtesy Nesto via its website.