A B.C.-based financial institution is taking an equity stake in a local startup as it looks to trends in Europe to access better foreign exchange rates.
Central 1 announced July 12 it’s partnering with Vancouver-based financial technology (fintech) startup Agility Forex to reduce costs for its member credit unions when moving money across borders.
Agility Forex has developed a digital platform that helps individuals, and small- and mid-sized enterprises bypass banks to access the interbank market for currency pricing usually reserved for large corporations.
“In Europe, you see a different market emerging there around cross-border movement of [foreign exchange],” Central 1 CEO and president Mark Blucher told Business in Vancouver.
“We believe that that type of disintermediation that’s occurring in Europe will find its way to Canada and ultimately we’ll start to have a much more competitive market here.”
The partnership with Agility Forex will see Central 1 use its new subsidiary, C1 Ventures, to take a 28% equity stake in the startup as well as a boardroom seat.
Blucher said it’s yet to be determined who will represent C1 Ventures in the boardroom.
“It’s a little bit of a philosophical positioning more than anything,” he said.
“I do like to operate with our partners with an equity stake and be able to have some level of influence in the continuing development in the level of capability in their organization.”
Blucher, who left ICBC last December to lead Central 1, said he will be working with the Central 1 board to develop a strategy by the beginning of the fourth quarter to identify other services its members need.
From there, it will be up to Central 1 to determine if it should build products and services in-house, pursue an acquisition or establish a joint venture.
