Vancouver-based alternative lender Montfort Capital and its subsidiary, TIMIA Capital, have teamed up with American institutional asset manager Arena Investors to help “fill a void” in the technology lending space left by the collapse of Silicon Valley Bank (SVB).
Montfort and Arena have agreed to establish a joint tech lending venture with “initial capacity” to deploy up to $100 million USD to tech entrepreneurs across North America. Arena will provide up to $95 million of this amount, while Monfort has committed $5 million.
TIMIA, which provides flexible private credit products like venture debt to North American tech companies, will service the joint venture and earn fees for doing so.
TIMIA claims to have seen an increase in demand for its products since SVB shut down and the VC market cooled.
The launch of this initiative follows SVB’s recent collapse in March, which TIMIA president Monique Morden argued has “created a significant opportunity” for other private tech lenders. Morden claimed to BetaKit that this shifting competitive landscape, coupled with the cool venture capital market driven by high-interest rates, has fuelled an increase in demand for TIMIA’s loan offerings, particularly among higher-revenue firms.
Founded in 2015, TIMIA lends to growing B2B software firms based in Canada or the United States with $2 million to $20 million in annual recurring revenue and product-market fit. The tech lender claims it has written $200 million in total loan facilities to date to a list of 80 past and current portfolio companies that has included Wagepoint, Beanworks, and RocketRez.
Launched last year, TSXV-listed Montfort is TIMIA’s parent company. Montfort oversees a broader portfolio of private credit brands, from TIMIA to asset-backed lender Pivot Financial, residential mortgage-focused Brightpath Capital, and insurance lender Langhaus Financial. Arena, which was founded in partnership with the publicly-traded Westaim Corporation, is a shareholder in Montfort.
Morden, who joined TIMIA as president late last year, noted that this new joint venture combines Arena’s experience in growth-oriented specialty finance with TIMIA’s expertise in originating and managing tech-focused loan portfolios.
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In a statement, Arena managing director Victor Dupont said he believes “the opportunity in private credit remains significant,” adding that he expects to see “substantial demand” from companies seeking financing going forward.
This capital infusion will give TIMIA the capacity to more than double its current loan book. Morden said this funding also grants TIMIA the capacity to do bigger debt facilities, which will enable the firm to extend its offerings to larger growth companies.
“Previously TIMIA has raised via [a limited partner] structure which gets more challenging to scale,” said Morden. “A [joint venture] approach helps us scale the business faster.”
Feature image courtesy TIMIA Capital.