Toronto FinTech company Purpose Financial has secured $53.5 million CAD from Allianz X, with the German investor acquiring a minority stake in the company. The transaction remains subject to regulatory approval.
UPDATE 01/02/2021: Allianz X’s investment in Purpose Finacial officially closed as of March 1, 2021.
Allianz X is the digital, FinTech-focused investment unit of Allianz Group, a global insurance and asset management firm. Allianz joins existing Purpose investors OMERS and TorQuest.
Purpose Financial plans to use the capital to accelerate its growth and fund product development.
Founded in 2013, Purpose Financial is a financial services company that provides investors, wealth advisors, portfolio managers, entrepreneurs and SMBs with asset management, wealth management, banking tools. Purpose’s core businesses include Purpose Investments, its asset management division, Purpose Advisor Solutions, its wealth-as-a-service platform, and Thinking Capital, its small business lending system.
Purpose Financial plans to use the new capital to accelerate its growth and fund product development. According to the company, the transaction is “an initial step in a strategic cooperation between Purpose Financial and Allianz.” As part of the deal, a member of the Allianz X team is joining Purpose’s board of directors.
Som Seif, CEO of Purpose, said the deal gives his company additional resources and expertise to accelerate its growth. He added that the company is still in the early stages of its journey to innovate within the financial services sector.
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Alexander De Kegel, deal and project manager at Allianz X, called Purpose is “well positioned” for future growth in asset management and SME lending, identifying opportunities to capitalize on developing and distributing retirement solutions and investment products.
Allianz’s portfolio also includes telemedicine provider AmWell, business-to-business FinTech C2FO, and challenger bank N26. In 2019, Allianz X led Wealthsimple’s $100 million investment round.
Last year, Purpose’s Thinking Capital acquired fellow small business lender Ario in order to better support SMB recovery during COVID-19. Purpose initially purchased Thinking Capital in 2018 for a reported $200 million. In 2019, Purpose acquired CreditGenie, a Toronto-based startup focused on point-of-sale financing, for an undisclosed amount.
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