Portag3 Ventures pulled in $321.2 million in closing its second fintech-focused fund, making it the largest Canadian investing pool committed to early development in a sector that saw a decline in interest this year.
The fund, which initially raised money last year, already has made investments in 17 companies – among them financial services provider KOHO, artificial-intelligence software maker Integrate.ai, and Diagram Ventures, which co-founds ventures in the financial and insurance sectors. Portag3 is the venture capital arm of Sagard Holdings, an alternative asset manager founded by Power Corporation of Canada.
Besides growing to be Canada’s biggest fintech-focused VC fund, Portag3 is “one of the leading Series A/B fintech-focused funds globally,” Paul Desmarais III, co-founder and executive chairman of Portag3 Ventures, said in a statement.
The successful raising of funds by Portag3 may be an indication of renewed interest in the fintech industry, which has seen investments slow. Worldwide, private equity and venture investments in the sector have dropped off sharply from last year, to $54.7 billion so far this year from $98.1 billion last year, according to PitchBook.
While investor cash has decreased, consumers are enthusiastic about fintech as they seek more accessible and efficient, and less costly, banking services. Consulting giant Bain & Company, in its annual banking report, said that more than six in 10 Americans would buy a financial product from a tech company.
Among investors in the Portag3 fund is Cincinnati-based Western & Southern Financial Group. James Vance, treasurer of Western & Southern, said the company is looking to possibly use new software from the ventures in the Portag3 portfolio or even expand business ideas that may have worked in Canada to the U.S.
- Power Financial, IGM Financial, and Great-West Lifeco., which backed Portag3’s first fintech-fund fund, returned as investors. New investors include National Bank of Canada, Intact Financial Corporation, Guardian Capital Group, Equitable Bank, La Capitale Insurance and Financial Group and SSQ Insurance.
- Earlier this year Portag3 announced the creation of a group of senior advisors, including Gregory Fleming, president and CEO of Rockefeller Capital Management and Peter Hancock, former president and CEO of AIG. The group’s aim is to provide expertise to Portag3’s portfolio companies, as well as support its investment team in sourcing deals.
- Portag3’s first fintech-focused fund invested in a number of companies including Clearbanc, Drop, and Wealthsimple.
- Fintech investments, while down in 2019, did surge for the five previous years, to $98.1 billion from $14.1 billion, according to PitchBook.