Power Corp. of Canada is taking the long view when it comes to fintech
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A Montreal-based multinational is moving to establish a firm stake into Canada’s fintech start-ups, creating strong links with a nascent industry that is already rendering the traditional financial business model obsolete.
Among Power Corp. of Canada’s latest steps is raising $165 million in its first funding round (via its in-house venture fund Portag3) for Wealthsimple, a robo-adviser that is attracting young Canadian investors wary of traditional industry players.
Power has also positioned itself as a controlling shareholder in Wealthsimple. Portag3 co-founder and executive chairman Paul Desmarais III stated that Power supports Wealthsimple’s intentions to go public in the future.
“Our goal is to create a global category leader based in Canada, and I think we’re well on our way to doing that,” Desmarais told Bloomberg in an interview.
Read more: Housing market slowdown, fintech weighing upon Canadian banking segment
Portag3 has also raised $198 million in its second funding round. Half of the sum came from the company’s own units, while the other half represented a diverse range of investors, including National Bank of Canada and Intact Financial Corp.
“What brings together all of the investors is that they view the financial services industry as being ripe for change and they want to be positioned to take advantage of that change,” Desmarais explained.
The executive added that Portag3’s strategy will be playing the long game and ensuring that the start-ups reach lasting sustainability.
“I believe that in fintech you need a minimum of 10 years to see winners emerge,” Desmarais said. “We want to accompany companies through that cycle.”
