Koho recently announced a new product aimed at helping tenants build credit by consistently paying rent. It’s not the first startup to offer this feature—both Borrowell and Chexy have similar offerings—but it highlights how Canadian FinTech companies fill gaps in the market left by traditional banks. Earlier this year, Beacon launched from stealth to build a financial super app for immigrants. Manzil, which has been working to provide Canadian Muslims with financial access since 2017, announced in August it has now financed more than $50 million CAD in halal mortgages.
Young Canadians and new immigrants are not well served by traditional financial institutions, according to a report by McKinsey. Digital-savvy Gen Z and millennials want flawless online access to their financials. Newcomers from Europe and countries like China and India, where using apps to bank is common, are more inclined to use tech companies for their everyday financial needs.
For the banks to offer similar products as consumer-focused startups, Karim Gillani, general partner of FinTech investor Luge Capital, said “it’s a meaningful lift to do that in time, money, resources. And it probably wouldn’t be as good a product that’s delivered by a nimble team built on modern technologies.”
“I always tell our portfolio companies: one of their biggest assets that they have against the incumbents is speed,” he continued. “Because incumbents have a big brand, a big customer base, a huge balance sheet, decades of history … they have all of these assets that could seemingly be the thing that crush these small FinTech companies, but FinTech companies have speed, which these large incumbents don’t have.”
McKinsey says targeting the underbanked is one way Canadian FinTech companies can ensure long-term success. And to make a comeback from the lows of 2022, their silver bullet might just be speed.
Thanks for reading on and ’til next week,
Bianca Bharti
Newsletter editor
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TOP STORIES OF THE WEEK
Shopify taps Microsoft executive Mikhail Parakhin as its new CTO
According to his LinkedIn, Mikhail Parakhin had been with Microsoft since 2019, most recently serving as CEO of advertising and web services, with previous experience as the president of its web experiences team and its corporate vice-president of technology.
In a statement, Shopify said Parakhin led Microsoft’s artificial intelligence (AI) advancement by helping to build consumer and enterprise-facing products like Copilot. The company added that Parakhin is “one of the finest machine learning (ML) crafters on the planet” and said he will oversee its engineering and data organizations.
Sagard hires Georgian’s Parinaz Sobhani as investment firm’s first head of AI
Parinaz Sobhani has spent the past 15 years focusing on AI in academic and industry roles. With a PhD from the University of Ottawa specializing in natural language processing, Sobhani has helped develop end-to-end neural machine translation models at Microsoft alongside time working at other research labs.
For the last seven-and-a-half years, Sobhani has worked at Georgian, a growth-stage business-to-business software investor, where she most recently served as the Toronto-based firm’s head of AI.
Benevity appoints MeridianLink president Christopher Maloof as CEO, Kelly Schmitt steps down
Calgary-based charitable donation management software firm Benevity has announced that Christopher Maloof will be replacing outgoing CEO Kelly Schmitt on Sept. 3.
Maloof had been serving as an operating partner at prominent American software-focused private equity firm Thoma Bravo, and was also president of California-based digital lending firm MeridianLink up until this month according to his LinkedIn.
Viggle AI closes $26-million CAD Series A to expand AI-powered video generator
Toronto-based Viggle launched its app this March, and the capabilities of its tech went viral shortly thereafter when videos began circulating online of Joaquin Phoenix’s Joker persona replacing rapper Lil Yachty’s stage entrance at the Summer Smash Festival in 2021. This turned into a trending meme format this April, when social media users began using Viggle to insert other celebrities and characters into the same video.
This helped the early-stage AI startup amass a community of more than 4.3 million members on the messaging platform Discord, and secure fresh financing from Silicon Valley’s Andreessen Horowitz and Toronto-based Two Small Fish Ventures.
Hardbacon to file for bankruptcy after Google search changes crush affiliate business
Montréal-based FinTech startup Hardbacon, which offers a free budgeting app and generates revenue through lead generation and affiliate marketing for financial products, has shut down after seeing most of its Google traffic vanish over the past year, following some updates to the search giant’s algorithm.
Hardbacon announced in an Aug. 15 blog post that it has suspended its operations, let go of its remaining employees, and plans to declare bankruptcy “in the coming days.”
This move comes 11 months after Google implemented some updates designed to combat spam that led to a steep decline in hits to Hardbacon’s website, a blow from which the search engine optimization (SEO)-reliant company was never able to recover, co-founder and CEO Julien Brault told BetaKit in an interview.
Happipad has only signed 31 leases since signing $1.3-million deal with Nova Scotia last August
Non-profit home sharing platform Happipad has only facilitated 31 lease signings as of Aug. 28, 2024, just over one year since it signed a $1.3-million deal with the Province of Nova Scotia, the province’s Department of Municipal Affairs and Housing told BetaKit this week.
Happipad first partnered with the Nova Scotia government in June 2023 to help people displaced by the province’s unprecedented wildfire season find housing. The province expanded the partnership in August 2023 by investing $1.3 million CAD over two years to make the platform available across the province.
ALL IN 2024 returns to Montréal for its second year
Following the success of its inaugural event, ALL IN 2024, co-organized by SCALE AI, the Montréal International Center of Expertise in Artificial Intelligence (CEIMIA), and Mila, is back for its second year, promising to be Canada’s most significant event dedicated to artificial intelligence.
The right Caliber for Canada
When Esha Chopra first met with the team at Caliber Interconnects, she was presented with a vast array of deep tech innovations—from autonomous mobile robots to cutting-edge semiconductor test services.
Caliber Interconnects, a deeptech engineering technology company, founded in India and headquartered in Singapore, comes with a diverse range of expertise and a global presence with a focus on hardware design, integrated circuit package and substrate design, high-density interconnect design, and silicon testing. The team was eager to launch in Canada, however, with a wide portfolio of products, the real challenge was figuring out which ones would resonate.
Technology complicated travel. FlightHub is simplifying it
Last year, global travel finally returned to pre-pandemic levels. But at the Montréal headquarters of FlightHub, one of North America’s largest online travel agencies, Ramzi Rahbani, FlightHub’s VP of Products, Customer Platforms and Innovation, began to notice that travellers themselves were not the same.
While the company had built an impressive brand, tech stack and services around offering customers easy access to affordable flights—facilitating more than 30 million travel connections since 2012—Rahbani said that FlightHub customers began to express frustrations that had nothing to do with price.
Join ALL IN 2024: The largest event dedicated to Canada’s AI
Participate in the second edition of ALL IN, the largest event dedicated to Canadian AI, happening in Montreal on September 11 and 12. Building on last year’s success, which brought together over 2,300 AI enthusiasts from around the world, leaders from all sectors will gather again this September to explore the best of Canadian AI.
Led by Scale AI, co-organized with Mila and CEIMIA, and supported by the Canadian AI ecosystem, this must-attend event unites all the community’s pillars—from those who imagine and define AI to those who build and adopt it.
Hear from over 200 speakers, discover the latest AI advancements, engage in live demos, and connect with leading AI solution providers, including Canada’s top 100 AI startups and international delegations from over 40 countries.
Funding, Acquisitions, and Layoffs
VAN – ChopValue – $4M CAD
VAN – Uni-One – $10M CAD
AB – PrairiesCan invests $15.5M CAD in 16 projects
SK – PrairiesCan doles out $6.3M CAD
OTT – Feds fund $8M CAD for 2SLGBTQI+ entrepreneurship
TOR – New School Foods – $8M CAD
TOR – Carbon6 acquires Junglytics
TOR – Givex to be acquired by Shift4 Payments for $200M CAD
The BetaKit Podcast
The BetaKit Podcast
AI roundtable: Hugging Face, Zapier, Tenstorrent (and more)
“Verticalized AI applications right now are available, right now accelerating industry after industry.”
AI is moving so fast it can be hard to keep up. The BetaKit Podcast has you covered with vantage points on AI from: Dr. Sasha Luccioni (Hugging Face), Reid Robinson (Zapier), Solon Angel (stealth startup), Darian Shirazi (Gradient Ventures), Joella Almeida (MedEssist), Chris Walker (Untether AI), and Eric Duffy (Tenstorrent). Rob and Douglas do their best to keep up.
CALLING ALL STARTUP FOUNDERS
Join the Startup Experience at Elevate Festival 2024, powered by Moneris
Elevate Festival, Canada’s premier tech event, is back in Toronto from October 1-3, 2024. This is your chance to join 10,000 tech enthusiasts, including investors, industry leaders, and potential partners.
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Don’t miss this opportunity to elevate your startup in Canada’s booming tech ecosystem.
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Image courtesy Manzil.