Fintech startups were the most-funded in 2021, raising more than 20% of venture capital dollars across 5,000 deals around the world.
But as much of the economy ground to a halt last year—with even the fast-growing tech sector feeling impacts of stagnation and uncertainty—we witnessed the first snowfall of what some dubbed a looming “Venture Capital Winter.”
The flow of capital withered from a torrent to a trickle.
As 2023 soldiers on—is it already autumn?—we are seeing some selective thawing. While the Crypto Winter remains frigid, for example, other areas of financial technology are once again enjoying financial support from investors.
Below, we highlight a few Canadian fintech firms who found a little funding this fall—as well as a venture capital fund targeting fintechs, another promising signal.
There are well over 30 million business across North America, with roughly one-third of them applying for a loan every year. The continent currently sees 25 million businesses with existing debt, even though capital is difficult to come by: The National Small Business Association reports that nearly one-third of small businesses consider access to capital the most significant challenge they face.
In February, we reported on a Vancouver-based financial technology startup securing a million-dollar pre-seed round to reimagine how companies access and manage loans.
Co-founded by Kaylan Pepin and Roman Hartmann, Levr.ai uses accounting and banking APIs to automate and accelerate the process of finding and applying for a loan as well as managing existing loans.
The company recently revealed that its early round of capital, co-led Sprout.vc and MAVAN Capital Partners, has recently been bolstered. The B2B intelligent loans platform announced that it has accepted an additional $200,000 from two new investors—BC’s Western Universities Technology Innovation Fund (which last year invested in Victoria’s Frontly) and Japan-based Colopl Next.
Considering this additional capital still a part of the company’s pre-seed round, Levr.ai intends to pursue a formal seed round from global investors as the firm focuses on growth.
In September, the firm expanded its operational footprint south of the border. The expansion came as a result of Levr.ai “continually exploring new opportunities to extend its reach to provide more and better financial solutions to small and medium businesses,” according to the startup’s head of partnerships, Shane Stoneman.
Already, more than 1,000 small businesses use Levr.ai to understand lending options—a recently celebrated milestone for the company. These businesses can consider options from three dozen strategic lender partners on the platform, the fintech says.
The continued growth of the company—user signup volume this year has grown as much as 30% month-over-month, Levr.ai says—is a “testament to the dedication and talent of our team,” according to Pepin.
Levr.ai is targeting $3 million for its forthcoming seed round.
A spend management solution for mid-market organizations recently raised a sizeable round of funding toward a global expansion and bolstering of new payment capabilities.
Vancouver-based Procurify secured US$50 million. The Series C round was led by Ten Coves Capital, with participation from Export Development Canada and existing investors including Information Venture Partners and HarbourVest.
The hulking round more than doubles the company’s total equity funding to over $70 million, according to a statement issued by the BC fintech firm.
“This funding round will support our mission to give organizations real-time visibility and control over all business spend,” stated Aman Mann, chief executive of Procurify.
Spend management is one of the most significant challenges faced by organizations, according to Mann.
“Understanding how money exits the company is just as crucial as tracking the money flowing in,” explains Mann. “Not only do we want our customers around the globe to spend wisely and grow during the best of times, we also want them to leverage responsible spend practices to thrive during the worst of times.”
Procurify’s end-to-end platform enables organizations to consolidate workflows and data into a single system of record, unlocking real-time spend insights, among other features.
“By thriving in these challenging market conditions, Procurify has proven that there is a real need for Intelligent Spend Management,” argues Steve Lula, Partner at Ten Coves Capital.
Founded in 2013, Procurify operates a completely remote workforce.
Trusted by hundreds of customers across dozens of industries, the Canadian fintech manages over US$30 billion of global spend.
In 2020, a startup launched out of Montreal accelerator Founderfuel with a mission to “ensure human interactions would be at the core of commerce technologies.”
In October, QuoteMachine secured USD $3.7 million in seed capital to help realize its vision.
The Canadian financial technology firm received investment from Manresa Ventures, Clocktower Technology, Ventures and Precursor Ventures.
Pre-seed investors Telegraph Hill Capital, Real Ventures, and the Maple Leaf Angels also renewed support through this round, according to a recent statement from QuoteMachine, who stated that “Their belief serves not just as capital, but as a testament to the change we aim to bring to the realm of retail.”
Applying software to provide the best sales experience at scale, the fintech says it has assisted hundreds of small and medium-sized merchants across various verticals including Home Automation, Sport & Outdoor, and Safety Supply.
It’s an approach QuoteMachine calls “agile commerce,” which is gaining steam as omni-channel retail continues to undergo transformation as the digital reckoning unfolds.
The company aims to balance a pressing demand for software that delivers automation characteristic of e-commerce platforms with the unparalleled personalization that only human interactions can offer.
“Delivering frictionless and creative payment solutions is a big focus for our team and we’ll constantly deliver new features to better manage instalments, financing options, or digital payments,” the company says.
Moving forward, a major part of QuoteMachine’s mission is to serve a wider array of merchants.
“Every salesperson, particularly those in small businesses, deserves software that not only understands their challenges but also empowers them to overcome them at scale,” a blog post from the startup reads. “Our focus remains laser-sharp: to continually refine and enhance these tools, ensuring that all our customers, regardless of the scale of their operations, always have an edge and thrive.”
Luge Capital recently announced that it has raised $71 million in the first close of its second fund, Luge Capital Fund II, toward an ultimate fund size of $100 million.
LPs in Fund II include returning investors CDPQ, Desjardins, BDC Capital, Sun Life, Industrial Alliance Financial Group (iA), Fonds de solidarité FTQ, and new investor Inovia Discovery Fund I.
Like its debut fund, Luge Capital Fund II will invest in early-stage fintech startups in Canada and the United States.
In addition to the core investment thesis from its first fund, Luge is expanding its scope of investments to include verticalized fintech startups that operate at the intersection of financial services and other large industries.
Since the firm was launched in 2018, Luge has been executing on its strategy to invest in the most promising fintech companies in North America while working collaboratively with large financial institutions.
“Financial services impact the lives of every person, from opening a bank account and making payments to buying insurance and making investments,” said Karim Gillani, General Partner at Luge Capital. “By investing in high-calibre fintech founders who are solving the industry’s biggest problems, Luge is helping to drive innovation across the financial services that are the lifeblood of the economy and account for 20 percent of the GDP in the U.S. and in Canada.”