Montréal-based online mortgage lender Nesto has secured a nearly $1.5-billion CAD valuation as part of a new Series E funding round meant to bring AI into the lending process.
The news: Nesto announced the fresh funding, which included $107 million in primary capital and $195 million in secondary capital, on Wednesday morning. Nesto said it will use the money to develop its technology and AI capabilities so it can faster onboard partners and clients while scaling its platform.
The round is backed by new investors La Caisse, Fidelity, Picton Investments, and Endeavor Catalyst, as well as returning investors Portage, Diagram, NAventures, Fonds de solidarité FTQ, and Fondaction.
From the source: “I think in the AI world today, when you have the … deep knowledge, expertise in a specific vertical, and you marry that with technology and AI solutions, this is where you can make magic happen,” co-founder and CEO Malik Yacoubi told BetaKit in an interview.
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Following the thread: Two years ago, Nesto acquired the third-largest mortgage finance company in Canada in CMLS Group, vaulting it from a 350-person startup to a 1,100-person company. To help with the purchase, Nesto raised an undisclosed Series D round, which Yacoubi did not provide more detail on.
Today, Nesto says it is growing rapidly across all its business units, with more than $37 billion in mortgage originations this year and over $80 billion in mortgages under its administration, while profitably operating across Canada.
Final thought: The new funding coincides with the launch of Nesto’s Maestro AI platform, a tool the company claims can help lenders underwrite a deal in less than 2 minutes (historically, that process has taken at least a day, if not longer, to finish). Yacoubi said the launch is part of a continued pivot from a solely direct-to-consumer online mortgage lender to a “mortgage ecosystem” builder that builds white-label tech for Canadian financial institutions.
Feature image courtesy Nesto.