Vancouver-based Progressa is upping its access to capital ahead of plans to go public next year.
The financial technology firm announced Tuesday (August 13) it’s raised $84 million in an equity and loan funding round co-led by Canaccord Genuity Corp. and Gravitas Securities Inc.
“We do have a very capital-intensive business and really the equity was needed — and will continue to be needed — to unlock larger amounts of loan capital,” Progressa CEO Ali Pourdad told Business in Vancouver.
The company specializes in lending capital to non-prime consumers, using a platform to help clients consolidate debt or pay off overdue bills. Its software also helps businesses with collections.
“We’re both a technology company and a financial services business,” Pourdad said.
“What we’re doing here is putting enough equity on our book to really allow the financial services business to flourish.”
The technology side of the business is based in Vancouver, where the company was founded five years ago, but Progressa shifted its lending operations to its Toronto office in July 2016. The company now has more than 100 employees between the two offices.
Pourdad said that while Progressa continues to iterate its software, the building blocks on the technology side of the business are in place to help the company grow.
“So to properly scale the business you need to unlock loan capital,” the CEO said.
“That’s really what led us to this round and what led us to having to raise so much capital. The business is now ready to scale.”
The $84-million raise is anticipated to be Progressa’s final private funding round.
Pourdad said if market conditions hold steady, he hopes to take the company public by the end of 2019.
And plans for an initial public offering are one of the reasons Progressa partnered with Canaccord and Gravitas, according to Pourdad.
“They have a track record in the public markets, and so to the extent the public markets make sense to us next year … we feel Canaccord and Gravitas are the right team to lead us to the markets,” he said.
The round also included Eight Capital and Paradigm Capital.
The new equity capital will allow Progressa to access a forward-flow whole loan purchasing program for up to $72 million with Cypress Hills Partners.
