Armed with fresh financing from Portage Ventures, New York-based FinTech startup LoanStreet might soon expand its services north of the border.
Portage led LoanStreet’s $25 million USD ($32 million CAD) Series B round, along with Curql Collective, Coastal Financial Corporation, and Sterling Bancorp. Existing investors Third Prime Capital and Arbor Ventures also followed on into the round, bringing the company’s total financing to $39 million USD.
Founded in 2013, LoanStreet provides a variety of services for credit unions, banks, and direct lenders to manage their loan portfolios. With over 1,200 financial institutions using its software, LoanStreet says it will use its new funding to expand its participations platform for trading and reporting on loans, improve its loan analytics, and continue to develop its commercial loan servicing.
“We believe Canada could be an interesting market for LoanStreet and are in very early stages of exploring this opportunity.”
– Adam Felesky
“We are proud of the rails that we’ve built that make the loan ecosystem more transparent and liquid,” said Ian Lampl, CEO of LoanStreet, and former Deputy Chief Counsel for the United States’ Troubled Asset Relief Program (TARP).
Those rails are part of what attracted Portage Ventures to the company, according to co-founder and CEO Adam Felesky, who noted to BetaKit that the firm has increasingly been focused on infrastructure investments across its key verticals of banking, wealth management, and insurance (see Portage’s recent investment in Conduit’s ‘Stripe for DeFi’ API tech).
Calling LoanStreet’s offering critical and differentiated infrastructure for US credit unions, Felesky said the company had solved “the pain point of being able to lend to the communities they serve while ensuring they maintain a healthy and diversified balance sheet.”
“We believe LoanStreet has the opportunity to deliver their solution to other market segments and geographies which have similar constraints,” he continued.
An obvious geography with similar constraints would be the Canadian market, and Felesky told BetaKit that Portage has already validated a number of relationships the firm has in the Canadian ecosystem, including corporate partners, that could become LoanStreet customers (as the venture platform of Sagard, which has $12 billion in assets under management, the mind boggles at who those potential customers may be).
“We believe Canada could be an interesting market for LoanStreet and are in very early stages of exploring this opportunity,” Felesky told BetaKit.
One of Canada’s most active FinTech investors, Portage doubled the size of its Portage III fund in July of last year with a $145 million USD close. Through Fund III, Portage has already invested in FinTech companies from around the globe, including French insurtech startup Acheel, San Francisco-based personal finance platform Kikoff, and Montréal-based digital mortgage startup Nesto.