Toronto-based Financeit, which offers a suite of consumer financing solutions, has acquired the consumer loans businesses of Simply Group, its biggest competitor in the space, in its aim to become the leading home-improvement financing provider for Canadians.
The transaction involves the purchase of three entities that offer financing services for home improvement under the Simply group of companies: Simply Group Financial, SNAP Home Finance, and certain assets of EcoHome Financial. The trio has collectively facilitated over $3 billion in home improvement loans for more than 500,000 Canadians.
Though terms of the deal were not disclosed, an “industry observer” estimated the deal is worth between $175-million and $225-million, according to The Globe and Mail.
Financeit made US expansion plans when it was under Goldman Sachs’ ownership, but they never took off.
The Globe also reported that funding for the deal came from InterVest Capital Partners (formerly Wafra Capital Partners), which purchased Financeit from Goldman Sachs last year in a deal reportedly worth more than $350-million. Simply was reportedly outbid in that acquisition deal, shifting its plans to sell itself to Financeit instead.
Founded in 2011, Financeit calls itself a “point-of-sale financing provider” that serves the home-improvement, recreational-vehicle, and retail industries. In addition to its consumer loans, it also offers payment plans to enterprise businesses, big-box retailers, original-equipment manufacturers, and dealer networks for their projects and purchases.
RELATED: Wafra Capital Partners acquires Toronto FinTech startup Financeit from Goldman Sachs
Financeit’s platform is comparable to consumer-lending options offered by banks and buy-now, pay-later providers like Afterpay and Klarna. With Financeit, vendors and contractors can offer loans to their customers, allowing them to pay in installments. Its loans are offered through ServiceTitan and underwritten by Royal Bank of Canada, Sun Life Financial, VersaBank, and EQ Bank.
Under Goldman, Financeit told the Globe it thought it could crack the United States (US) market. Without the support it needed from Goldman’s digital consumer bank however, which focuses on the US, the expansion plan never took off, according to the Globe.
With new ownership in InterVest and its acquisition of Simply’s consumer-loans businesses, Financeit said to the Globe that its goal is to become the dominant source of financing for home improvement in Canada.