Powercorp-backed online mortgage broker nesto raises $76 million
nesto, the Montreal online mortgage broker, is raising $76 million in capital.
The cash is coming from Michael Rowell and Michael Paulus, the entrepreneurs behind Insurance IQ. Portage Ventures, Diagram Ventures, Breyer Capital, Marc Alloul and others also participated in the round.
All of Portage Ventures, Diagram Ventures and Nesto are ultimately backed by Powercorp, the Canadian mega financial services company owned by the powerful Demarais family.
“This new round of financing will enable us to reach even more consumers seeking the lowest rate for their mortgages right from the get-go,” said CEO Malik Yacoubi. “We are very grateful for the expertise of our investors as we set out to empower Canadians with a transparent and simplified mortgage process as they make one of the most important financial decisions in their lives.”
nesto is likely another tech company that has benefitted from the pandemic forcing so many to their laptops at home. The company says it has earned plenty of telling data over the past 12 months.
It says it has seen a 475 percent growth in mortgage applications on its platform over the past year, after launching just three years ago. Meanwhile, president and cofounder Malik Yacoubi says his company signs more than $100 million in mortgage contracts per month.
Paul Demarais III said that it is “undeniable that a growing segment of the population is looking for more simple, empowering and transparent financial services.” nesto’s digital mortgage solution, said the Portage Ventures chairman, “delivers exactly that.”
The company now boasts 92 employees.
Red-hot plans and a red-hot housing market
Yacoubi told the French-language newspaper La Presse that he wants his company to be the largest online mortgage broker within five years.
Indeed, the Canadian housing market has been hot – too hot for the likings of many. The number of new mortgages increased 41.2 percent in the first quarter of 2021 compared to the same period last year, according to Equifax.
To keep up such a pace would be difficult, given the likelihood of further federal intervention. Still, the numbers seem to paint a positive picture of the work being done by the folks at nesto.
The digital shift is real
Yacoubi said that half of Nesto’s mortgage volume is in Quebec, with 40 percent coming in Ontario and 10 percent elsewhere in the country.
“We have seen a digital shift among the population [in their consumption of financial services], especially insurance and investment,” Assurance IQ Michael Rowell said. “Mortgage financing is next on the list and Nesto is high on the list.”
(Photo credit: Diagram.ca)
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