What happened: Mogo and Difference Capital have completed an acquisition deal
Why it matters: The transaction gives the Vancouver fintech more access to capital to boost its growth plans
Financial tech firm Mogo Inc. will be a little different moving forward.
The Vancouver-based company has completed its acquisition of Difference Capital Financial Inc.
Mogo president and chief financial officer Greg Feller told Business in Vancouver the deal amounts to a financial transaction that will give his company access to more capital as it manoeuvres through the fintech landscape.
“We’re going after a multibillion-dollar market and the biggest barrier to entry, quite frankly, in the consumer fintech space is capital,” he said on June 21, the day of the deal’s completion.
“[This] brings another over $30 million of cash and investments onto our balance sheet.”
Mogo now has immediate access to about $8 million in cash as well as Difference Capital’s investment portfolio, which includes Vancouver-based tech mainstays such as Hootsuite Inc. and Vision Critical Communications Inc.
The market value of those investments sits at about $24 million, according to Mogo.
The deal to acquire these financial assets, originally announced in the spring, saw Mogo amalgamating with a subsidiary of Difference Capital, while each Mogo common share was exchanged for one common share of the combined company.
The end result is that former Mogo shareholders own about 80% of the combined operation.
Difference Capital was itself an early investor in Mogo, and Feller said the team at Difference believed Mogo could strengthen its growth plans with more access to capital.
When Mogo went public four years ago in June 2015, it was best known as an online lender with about 100,000 users.
The number of users as since expanded to about 800,000 and Mogo is offering additional products such as Bitcoin services, identity fraud protection and credit score monitoring.
The new Mogo will see a boardroom composed of Greg Feller, co-founder and CEO Dave Feller, as well as Michael Wekerle, Minhas Mohamed and Kees Van Winters.
On the executive side, Mogo will be retaining Difference Capital chief investment officer Tom Liston to continue managing the investment portfolio.
Difference CEO Henry Kneis is retiring.