Purpose Financial Acquires Montreal’s Thinking Capital for Over $200 Million

March 9, 2018

Purpose Financial have announced they acquired Thinking Capital.

This move brings the Montreal-based Thinking Capital’s leading lending platform to Purpose Financial. The acquisition is worth more than $200 million in cash and securities, according to industry sources. Thinking Capital will remain in Montreal and retain all of their employees. This move will create an innovative and technology-fuelled services platform for Purpose, which is based in Toronto.

Thinking Capital was founded in 2006 and has delivered more than $750 million in incremental funding to main street and increased the size of potential markets for SMEs around Canada. They have strategic partnerships with banks, brands and fintechs and have revolutionized what the lending landscape looked like for smaller financial institutions in the country. Thinking Capital currently works with the likes of CIBC, Staples, TouchBistro and more.

Since their inception, Thinking Capital has provided more than 15,000 loans ranging from $5,000 to $300,000 to SMEs around Canada.

“While 98 percent of businesses in Canada are small businesses, many have limited access to capital to fund their growth. As an early innovator in this market, we have spent the last decade evolving the language of small businesses credit,” said Jeff Mitelman, CEO and co-founder of Thinking Capital. “Under the Purpose Financial umbrella our time to market on product innovation and funding capacity will be greatly amplified.”

Purpose Financial’s move to acquire Thinking Capital is based on creating a business with a large and sustainable balance sheet along with the ability to create an intelligent and diversified funding model for other institutions.

“Purpose Financial has an unrelenting focus on building innovative, technology-driven financial solutions,” said Som Seif, CEO of Purpose Financial. “Thinking Capital is a clear leader in the SME business lending space, with credit adjudication technology and presence that are unmatched in the Canadian market. This acquisition brings together leading origination, asset management, and technology platforms as a unified entity, and enables us to bolster our product capabilities and optimize the technology, distribution, and funding model of our combined business.”

Seif is a Canadian entrepreneur who previously built and sold Claymore Investments and oversees around $5 billion in ETFs and mutual funds with Purpose Financial. He has plans to grow that total to almost $30 billion within six years.

Mitelman will transition from CEO of Thinking Capital to a managing partner of Purpose Financial as well as picking up a meaningful equity position alongside existing investors TorQuest and Thinking Capital management.

This is the latest nine-figure acquisition of a Canadian fintech, proving how—despite reports from KPMG—the fintech sector here is growing massively. Layer 6 was acquired for a reported $100 million in early January.