STATUS OF THE CANADIAN

FINTECH LANDSCAPE

(and beyond)

David Nault

Co-Founder, General Partner

2

Every

category of

financial services

is being

re-imagined

by nimble teams using modern technology

New Canadian Fintech Companies On the Rise

Source: Luge Capital, Crunchbase & AngelList (2018)

Payments

Vertical

Vertical

Share

Blockchain & Crypto

Lending & Mortgage

Insurance Tech

Wealth Tech

Personal Finance

Digital Banking & Infrastructure

Capital Markets

Other

13%

13%

13%

10%

10%

7%

6%

5%

23%

59% of fintechs are in

the top five verticals

100

4

More than 600 Fintech Companies in Canada

Source: Luge Capital (2018), Crunchbase, Hockeystick, AngelList, EY Report

600+

Fintechs

4 000+

Fintechs

1 600+

Fintechs

5

FinTech Funding Across Canada

Where Investors are Betting on Fintech

$600M Canadian Fintech Venture Investments in 2018

Note: In 2017, three companies

raised an aggregate $244M

31

72

59

75 new

Investments

19

As of Q

3: $500M

~ $500M invested to date in

2018 and projected to reach

$600M by end of 2018

Estimated

Source: Luge Capital, Crunchbase, AngelList & CVCA

7

In 2018, U.S. Investors Invested ~20x More Capital

Compared to Canada

Source: KPMG Pulse of Fintech H1 2018 Report

Fintech venture

investments in the U.S.

reached ~ C$6.7B in

the first half of 2018

~ C$10B

by end of 2018

As of Q

2: $

6.7

B8

CB-Insights_Fintech-Trends-2019

Global Fintech Investments Tops $39B in 2018

Annual Global Deals and Financing, 2014-2018 ($B)

Canadian Fintech Investments of $1.7B+ Since 2014

Source: Luge Capital and Crunchbase (2018)

# of Investments

by Stage

$ Invested

by Stage

Series A

Series B+

Pre-Seed and Seed

Series B

63.5%

21.0%

7.7%

7.7%

10.8%

33.4%

26.0%

29.8%

170+

companies$1.7B+

10

Canadian Fintech Investors

FinTech focused investors: ~$600M+ Other investors with investments in FinTech: ~ 4B+

Source: CVCA and Reseau Capital

Notable Fintech Financing in 2018

$1M

$400K+

$1M

$1.75M

$2.5M

$600K

$1.1M

$2.25M

$8M

$2.3M

$975K

$3M

Seed

$57.8M

$5.4M

$6.6M

$9M

$14.3M

$6.5M

$8.4M

$14M $25.8M

Series A

$105.2M

$23M

$10.1M

$12M

$36M

$62M

Series B

$153.6M

Source: Crunchbase, CVCA

$12M

12

Fintech M&A in 2017-2018 of Over $5.8B

* Estimated

** Majority stake acquired

$4.8B

$400M+

+

+

$302M +

$100M

$200M+*

+

+

$70M

Undisclosed

+

+

Undisclosed**+

Source: CVCA

13

FIs Supporting the Fintech Ecosystem

Ventures Ventures

Digital Garage

and Insurtech

Accelerator

program

FinTech Accelerator program

14

Recent Incumbent + Fintech Partnership Examples

15

Create Guide

Support Collaborate

CSA Regulatory

Sandbox

Unite

FinTech Summit

AMF Fin

Tech Lab

Canadian Fintech Ecosystem Collaboration

Animating the fintech

ecosystem

Adapting our regulatory

environment

Creating support for

entrepreneurs

Increasing capital for

fintechs

How is fintech

being applied?

17

Money Remittance:

• $4 billion/ month

• 4M customers

• $8 million in profit

Consumer/ POS Lending:

• 40% of all e-commerce sales in Sweden

• 2000 employees

• Funded $21 billion in online sales

Credit Scoring:

• $368M in funding

• >$500M revenue

• 700 employees

Data Aggregation/

Credit score

• Used by >115

Fintechs

Process Automation:

• AI and ML to reduce manual

processes

• $50M in fundingReinventing Banking:

• 3 years old. $1.7B valuation

• 3M accounts

• $250M in funding

• 630 employees

Accounting Automation + AI:

• $25M in funding

• 300 employees

• Used by > 1,000

Accounts payable/ receivable

automation

400M

users

=> Ant Financial leads the development of the first financial blockchain standard for IEEE

600M

users

“Dear finance professionals…

the times, they are a changing…”

• You will want to understand how technology can be used, so that you can apply it to your

job and be part of this transformation process.

• Finance professionals will need to train fintech software and work on more complex or

strategic issues.

• Automation will significantly reduce administrative tasks. You will continue to have an

important role in the relationship with clients, but will be increasingly assisted by more

digital tools.

• As alternate currencies and blockchain technologies become increasingly integrated into

the finance industry, there will be a greater need for roles in security fields like encryption,

identity protection, risk and compliance.

• Roles will require personnel having strong soft skills — like personal attention and empathy

— that cannot be replicated (yet!) by machines

• Fintechs need professionals that understand financials services are in-demand

22

About Luge Capital: $75 Million Fund

Investing in early-stage fintech companies and AI solutions applied to

financial services

23

Our investors and partners:

Our areas of interest:

Thank you / Merci

@LugeCapital

www.luge.vc

Building Fintech Champions

Read our blog that summarizes this presentation.

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