What happened: Vancouver tech firm specializing in helping mortgage brokers has made an acquisition
Why it matters: Deal comes at a time low interest rates are keeping real estate sales relatively brisk even amid pandemic
A Vancouver fintech is pumping up its own offerings with an acquisition deal of a fellow Canadian firm.
Lendesk Technologies announced Tuesday (October 27) it’s purchased Calgary’s Finmo Financial Technologies for an undisclosed sum, confirming that the deal closed earlier this month.
The B.C. company is best known for its platform that connects mortgage brokers to 200 lenders across the country, while the Alberta company helps brokers request relevant documents from clients for online mortgage applications.
Finmo’s technology, which also converts client documents into PDFs for easier management, will be integrated into Lendesk’s platform later this fall and all Finmo employees will retained in the deal.
The acquisition also changes the look of the Lendesk’s management team.
Finmo president and co-founder Greg Williamson now serves as Lendesk’s chief revenue officer and Finmo CEO and co-founder Carter Zimmerman now serves as Lendesk’s chief product officer.
The deal comes at a time low interest rates have kept housing sales relatively brisk amid the pandemic-induced economic downturn.
Just 18 months ago, Rock Holdings Inc., the American parent company of Quicken Loans, took a controlling interest in Lendesk (terms of that deal were not disclosed).
The Vancouver firm is now a portfolio company of Rock Holdings’ subsidiary Rocket Companies Inc. (NYSE: RKT).
“As an entrepreneur, I’m quite proud of what we’ve done here," Lendesk CEO ALex Conconi told BIV in April 2019.
At the time, the industry was still grappling with the introduction of Ottawa’s B-20 stress test, which tightened up the lending industry in Canada.
A once-white-hot real estate market like Vancouver’s eased off the throttle as a result.
But Conconi said those developments weren’t necessarily detriments.
“When markets cool that’s when you actually see the innovation. When markets are hot and everybody’s winning, innovation almost seems like a little bit of a distraction,” he said.
Conconi founded Lendesk in 2014, overseeing its growth as it expanded to 45 workers ahead of the Rock Holdings acquisition last year.