Financial services company Desjardins has announced a new $45 million FinTech investment fund, aimed to support startups that use innovative technology or business models to address existing or emerging issues in the financial industry.
“Digital transformation is fundamentally changing the relationship between consumers and businesses in many industries.”
The fund was developed for Desjardins to fund initiatives that have the potential to benefit its members and clients. The investment pool will be managed by Desjardins Capital, the private investment arm of Desjardins Group. Through these investments, the company aims to improve the member-client experience, identify opportunities for investing in technology and new business, and ensure access to innovative financial technologies.
“Digital transformation is fundamentally changing the relationship between consumers and businesses in many industries, including the financial services sector,” said Guy Cormier, president and CEO of Desjardins Group. “With this investment pool, Desjardins will be able to broaden its role as a socioeconomic leader by connecting members, communities and businesses, while engaging with these stakeholders on digital platforms.”
According to The Globe and Mail, the new fund will cut cheques ranging from a few hundred thousand dollars to as much as $3 million, looking for equity stakes of 10 to 25 percent in each startup.
Desjardins has previously invested in several FinTech companies before the launch of the new fund. In January 2018, it invested in Montreal-based Mylo, a company that allows users to round up their purchases and invest the spare change. It also participated in a $75 million round for Luge Capital, a VC firm with offices in Montreal and Toronto in June 2018, with a focus on Fintech and AI.
As part of the new fund, Desjardins made its first investment of $400,000 in X-TELIA, a Quebec-based wireless network company focused on IoT and home automation. Desjardins said the investment will allow X-TELIA to expand its network across rural Quebec and help Sollio Agriculture, the agri-business division of La Coop fédérée, a Desjardins partner organization, modernize its practices.
Martin Brunelle, vice president of transformation and special projects at Desjardins, told the Globe three more FinTech startups are expected to receive investments from the fund in the near future.
Image courtesy Desjardins