According to data from the Fintech Growth Syndicate, Canada has 831 startups operating in the financial technology industry. However, the number of venture capital funds in the country for this sector is extremely limited.
Consequently Luge Capital, which is a venture capital fund focused on Fintech and artificial intelligence is has made its move to capitalize on the opportunity provided by the funding gap in the industry. The Montreal and Toronto based firm has managed to raise $85 million for the debut initiative and plans to start seed investments ranging between $150,000 and 2 million.
Luge capital is a relatively new enterprise and is currently headed by Karim Gillani and David Nault, both of whom, have deep experience in venture capitalism and startup operations. The firm is supported by a number of backers including Fonds de solidarité FTQ, iA Financial Group, Sun Life Financial, BDC Capital, La Capitale, Caisse de dépôt et placement du Québec, and the Desjardins Group.
Focus to Remain on Canadian Tech
Luge Capital will be involved in the deployment of startups across North America. However, its primary focus will remain on Canadian technology companies. Karim Gillian stated: “We’ve seen growth in terms of absolute numbers of Fintech companies. 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.”
The company has already made 5 investments, they have disclosed details about 3 of these investments. One of these is a startup named Finaeo, an insurance technology company, Flinks, a service to connect business apps to the bank accounts of customers, and Owl, a service for customer onboarding for financial institutions.
Further, Gilliani spoke about the immense potential in the Canadian market saying: “We are going to see more growth in venture in Canada. 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.”
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