Toronto-based FinTech startup Borrowell is set to acquire Refresh Financial, a fellow Canadian company offering financial products that allow customers to access forms of credit.
Borrowell offers a variety of financial services for individuals, spanning credit monitoring and cards, personal loans, mortgages, investing, insurance, and banking. According to the startup, its acquisition of Refresh doubles its size in terms of revenue and employees. While the terms of the deal were not disclosed, the transaction is expected to close in the first quarter of 2021.
According to the startup, its acquisition of Refresh doubles its size in terms of revenue and employees.
Refresh is a FinTech startup based out of Central Okanagan, British Columbia. Since it was founded in 2013, the company has offered a Secured Savings Loan, which allows customers to build credit and savings. It later expanded its product line to include a secured Visa credit card. Refresh claims to work with more than 800 referral partner locations across Canada and to have had more than 100,000 Canadian customers.
Borrowell and Refresh have been working together over the last three years, with Refresh a partner on Borrowell’s platform and the two companies having an open referral relationship for customers. Following the deal, Refresh is set to be integrated with Borrowell, with the Toronto startup’s co-founder and CEO, Andrew Graham, noting plans to do so over the next six to 12 months. Graham told BetaKit that for the time being Borrowell has no plans to make any changes to the Refresh brand.
The acquisition of Refresh represents a bit of a turnaround for Borrowell, which eight months ago laid off approximately 20 percent of its staff as a result of the onset of the COVID-19 pandemic. Graham told BetaKit at the time that even as consumer concerns around finances had skyrocketed, many financial institutions were pulling back on writing new business, which had a direct impact on Borrowell. A key aspect of Borrowell’s business is allowing consumers to compare financial products from more than 50 partners and get personalized recommendations based on credit profiles.
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Graham told BetaKit Borrowell has continued to see some financial institutions pull back on customer acquisition and advertising on its site. However, the CEO noted that Borrowell has recovered since April at a pace that Graham said was “faster than anticipated.” Since that time, Borrowell has re-hired some of its laid-off employees as well as made new hires.
The pandemic has had a toll on individuals and businesses alike. While statistics showed that in the Fall Canadians were paying down debt this year, there are expectations that a wave of bankruptcies is set to follow.
“Unfortunately, COVID has caused significant financial worry for many families,” Graham told BetaKit, adding, however, “as a result, and also because of some significant enhancements we made to our product, we’ve seen Borrowell usage jump dramatically.”
Borrowell was founded in 2014 and has raised more than $72 million to date, including $36.7 million in equity venture capital. In 2019, the startup topped one million users, and closed its most recent about of funding, a $20 million Series B round co-led by White Star Capital and Portag3 Ventures. A year ago, Borrowell also ventured into a new business category, launching a suite of digital tools to help consumers track, manage, and pay bills on time.
The startup claims to have provided more than 1.5 million Canadians with its financial services. The Toronto-based startup’s mission is to “make financial stability possible for everyone.” It stated acquiring Refresh Financial brings it closer to achieving that mission.
Image courtesy Borrowell