There are 831 financial technology startups headquartered in or operating in
Canada, according to data collected by Fintech Growth Syndicate, yet only a
handful of venture capital funds specializing in the region and sector.
Luge Capital [https://www.luge.vc/], a fintech and AI-focused venture capital
fund headquartered in Montreal and Toronto, is looking to close that gap. The
firm has raised $85 million for its debut fund and plans to make seed
investments as small as $150,000 and as large as $2 million.
The relatively new outfit, founded in 2018, is led by David Nault, a former vice
president at iNovia Capital, and Karim Gillani, who previously led corporate
development for Xoom, thePayPal [https://crunchbase.com/organization/paypal] -acquired remittances startup.
Luge Capital [https://crunchbase.com/organization/luge-capital]is backed by iA
Financial Group, BDC Capital, Caisse de d?p?t et placement du Qu?bec, Desjardins
Group, La Capitale, Sun Life Financial and Fonds de solidarit? FTQ. In a
somewhat unusual series of events, some of the limited partners approached Nault
and Gillani and said if they raised a fund, they would bankroll them. And so the
pair left their jobs to raise a debut vehicle to support fintech companies in
Canada?s growing tech scene.
Luge Capital will deploy capital to startups across North America, but will
focus on Canadian tech.
?We?ve seen growth in terms of absolute numbers of fintech companies,? Gillani
tells TechCrunch. ?We think it?s because there?s new access to capital.
Companies can now find themselves getting funded and there?s a bigger appetite
for larger companies to partner with these startups.?
Luge Capital has to date made five investments, three of which they were able to
disclose. Gillani says they?ve provided checks toFlinks [https://flinks.io/],
which helps businesses connect apps and users? bank accounts;Owl
[https://owl.co/], a provider of a service that supports financial institutions
with customer onboarding, fraud detection and more; and insurance technology
According to PitchBook, nearly $3 billion has been invested in Canadian
startups, a record year for the country.
?We are going to see more growth in venture in Canada,? says Gillani. ?I think
we are going to see founders in Canada having more of a global mindset such that
they look at Canada as an initial market for them, with a focus to expand
geographically soon after they?ve been able to prove the model in Canada. And I
think because of that dynamic, we are going to see more and more outside capital
to finance these founders.?