Speaking during a lunch session at this year’s FinTech Forum in Montreal, Paul Desmarais III announced that Portag3 Ventures has established a new fintech fund, Fund II. As of today, the fund has closed $198M, and expects that number will rise to $300M according to this morning’s press release. While speaking to the crowd, Desmarais suggested that number could be more like $400M when all is said and done making it “significantly larger” that the first fund.
“$60 billion has been invested into FinTech over the past year” Desmarais told the audience during his lunchtime presentation. He later added that Canada has $4.4 trillion in investable assets, 80% of which is held by the big 5 banks. He believes that Portag3 is well positioned to cultivate fintechs all over the world because of its ability to connect talent, capital and network, pointing repeatedly to investments they have made in Greece, France and elsewhere, on top of their Canadian success stories like WealthSimple. Desmarais explained, he looks at the entrepreneur first when making investments. “We look at disruptors and enablers wherever they may be in the world”.
Power financial, IGM and GreatWest Lifeco are the principal investors in the new fund, with other backers including National Bank, Intact, Equitable Bank, La Capital and a handful of others.
Desmarais also explained why he is such a believer in FinTech, telling the crowd he believes that banks have a difficult time providing a great customer experience because they offer products that are “good enough for everyone”, which essentially makes them perfect for no one. Following that thinking, he went on to say that fintechs who tackle 1 problem at a time provide a glimpse into the future of the financial industry in Canada, explaining that financial institutions will likely have little choice but to begin selling hyper-segmented products, like a fintech does. He expects this will begin to provide a superior customer experience. As he showed during his presentation (see photo) the pace at which people adopt new technologies has accelerated greatly. A trend he expects will continue and one that could potentially play right into the hands of large scale fintech investors.