Canada, like the US, should also be regarded and given kudos for developments in technology and innovation. As it keeps up with this fast-paced world, it has made its emergence felt in financial technology companies or those in the “fintech” field. Let’s take a closer look at some of these innovative and leading fintech companies that provide financial solutions to customers.
An Innovative Hybrid – What are Fintech Stocks?
Wordplay of the words “finance” and “technology,” the fintech industry doesn’t really play and mess around – they mean business. It’s a broad category of companies that entwine financial companies with the newest technology. Hence, “fintech.”
The emergence of potential fintech companies has resulted in people choosing to do traditional transactions themselves and with cash. This reality is amidst the growth of cashless payments and online banking now offered by financial institutions. Fintech companies embrace these preferred traditional ways with a flare of the newest technology available, providing excellent service to their valued customers.
Types of Fintech Companies in Canada
As broad as its term implies, fintech companies merge the world of technology with the world of finance. Numerous types of companies take shed under the so-called “fintech umbrella,” including those that provide:
- Payment processes
- Banking, both online and mobile
- Lending, both P2P (peer-to-peer) and online
- Person-to-person payments
- Financial services
- Financial software
Top Fintech Stocks to Invest In
The long-term potential is quite vast in the fintech industry, so finding the best stock investment opportunity can be a hassle. With that in mind, here are some of the best options you want to add to your portfolio in terms of fintech stocks.
With its humble beginnings as a B2B or web-based business-to-business (B2B) that handles risk management and payment solutions, Cryptologic Corp now provides operations as a cryptocurrency miner and a company that develops blockchain applications.
Formerly known as Vogogo Inc., it had undergone a few significant changes since its conception by founders Rodney Thompson and Geoff Gordon back in 2008. It began focusing on cryptocurrency in 2013. The company went live in 2012; however, after failed attempts to gain traction, it was suspended in late 2016.
Its conceptualizers relaunched it in April 2018, then a miner of cryptocurrency and blockchain application developer after acquiring 14,000 mining machines and facilities in Québec. Mining cryptocurrency mining processes verify transactions and get added to the public ledger, also known as the blockchain. In addition, it is also the means of releasing new cryptocurrency.
Considered quite odd at first, many people think of Goldman Sachs as an old-school Wall Street business as usual – a complete 360 in terms of fintech innovation. But Goldman Sachs is transitioning – from a business model that seemed far-fetched only a couple of years ago to an investment bank and wealth manager, and eventually, a full-featured consumer bank. It had the Marcus platform of savings and personal loans as its first component. However, in 2019, the company expanded and has become a credit card business, exclusively issuing credit cards for Apple. It has been reported that its upcoming products will include a new investment platform and checking accounts and that they’re just getting started.
Goldman builds out consumer business in a very fintech way – no costly branch network to think about, and a tech-focused approach maximizes customer value and efficiency. In addition, compared to most fintech companies, Goldman has massive investments in banking, which tends to be way better when it comes to turbulent markets, making it a less cyclical fintech stock.
Considered among the oldest fintech companies in the market, Green Dot is best known for pioneering prepaid debit cards twenty years ago. Their debit-card business remains to this day one of the largest but has already lost market shares to companies like Square and PayPal, two competitors that offer new and innovative solutions to the same problem. But Green Dot has begun to try capitalizing its key advantage — a banking charter — with creative moves like introducing a savings account with a 2% yield for Walmart Money Card customers. In addition, it has appointed a highly experienced CEO that promises to spearhead all banking efforts.
Keep Green Dot on your radar because of its BaaS, or banking-as-a-service platform. This platform used by companies such as Apple, Uber, and Stash is still in its infancy of realizing its true potential. Green Dot allows companies to offer banking products without becoming banks themselves. Instead, they essentially let these companies utilize their banking infrastructure as empowerment for their products – potentially becoming a significant growth industry in the future.
Often referenced as the “Amazon.com of Latin America,” MercadoLibre’s nickname certainly makes sense – a company that has an enormous e-commerce business that continuously grows at an impressive and fast pace. But the most exciting part in terms of a fintech approach is its Mercado Pago payments platform. They process billions of dollars in payment volume quarterly, and it keeps overgrowing. The fact that encourages the most is that Mercado Pago is growing faster in processing payments outside of the MercadoLibre e-commerce platform. Having a partnership with PayPal and other numerous runways in the Latin American payments industry ensures Mercado Pago’s continuous growth, and all could be just starting.
Mogo Finance Technology Inc., or simply Mogo Inc., is sometimes considered “the Uber of finance.” It operates a lending platform online that aims to provide young people with a wide array of credit solutions like short-term loans and prepaid credit cards.
Founded in 2003, it operates an online lending platform, providing millennials with numerous credit solutions. In 2018, they released “MogoCrypto,” used for buying and selling Bitcoin cryptocurrency. Since July 2021, over 1.6 million people have already signed up as Mogo users.
This Vancouver-based company debuted on the Toronto Stock Exchange (TSX) in June 2015. One vital investor is Fortress Investment Group LLC.
Read our review of Mogo’s services in Canada.
Founded in 2010 by Michael Gokturk, Payfirma is a payment processing company based in Vancouver. With its vision of allowing customers to pay anyway, anywhere, and at any time, it aids businesses in accepting online credit and debit card payments from virtually anywhere. Payments options include mobile, e-commerce, and in-store locations using only a single merchant account.
Payfirma uses a cloud-based platform in processing transactions. This innovation allows business analytics like sales data to be easily retrieved online. As a result, they have won numerous awards and honours, such as “the ACT Canada Innovation Award in 2012, the CIX Top 20 Innovators of 2013, the BC Business Top Innovators in 2013, DigiBC’s Top 25 Most Innovative Tech Companies in British Columbia in 2014, and the Fintech Company of the Year at the Canadian Fintech Awards in 2015.”
Between the years 2011 and 2013, Payfirma received C$5.5 million in angel funding. In 2015, formerly known as Dundee Capital Markets, a Dundee Securities, Ltd. division, have helped Payfirma with an investment worth C$13 million.
The undisputed leader in online payments, PayPal Holdings has become so much more than that. Its person-to-person payment platform called Venmo has risen as one of the industry’s leaders that continuously grow in terms of the massive user base at a breakneck pace. The company has also been acquiring businesses that complement its services. One example is Honey, an e-commerce tool. It has since built partnerships that could potentially expand its target markets.
Even having over 361 million active accounts, CEO Dan Schulman believes that PayPal can rise to a billion very soon. They even considered the COVID-19 pandemic a positive accelerator in helping PayPal’s growth. More people are now starting to choose shopping online and sending money to loved ones – friends and family via electronic means.
Quandl is a financial, economic, and alternative data platform based in Toronto. In 2021, the company was founded by Abraham Thomas and Tammer Kamel. They aim to provide accessibility to extensive datasets in the financial, economic, and social fields. These datasets come from companies like NASDAQ, Zacks Investment Research, and Zillow Group Inc.
Quandl permits access to data using an API or an application program interface that allows customers to customize the information in a format suitable for their preference. Many of the most significant hedge funds, banks, and consulting firms in the United States are included in their large customer base. Back in 2015, August Capital made a C$5.4-million investment with Quandl. A year after, Nexus Venture Partners initiated a round of funding that raised an additional C$12 million.
Shopify Inc. is a provider of a platform of cloud-based multichannel commerce for all types of businesses. It was founded in 2004 by Daniel Weinand, Scott Lake, and Tobias Lütke in Ottawa. Shopify gives merchants the ability to improve the overall customer experience by managing multiple sales channels like social media, web, and mobile. As of April 2021, Shopify had expanded to more than 1.7 million customers in around 175 countries. Their prominent customers include Heinz, Budweiser (part of Anheuser-Busch InBev SA/NV), and Mondelez International. They have raised C$100 million in their 2013 Series C funding before eventually going public in 2015.
Over recent years, Square has evolved from a merchant’s way of accepting credit cards with their mobile phones into what is now a large-scale small-business and individual financial ecosystem. They are now a processor of card payments that profits an annualized rate of over $100 billion. With its success, the company also thrives in its small-business lending platform known as Square Capital. As a result, it has started to catch serious traction from more prominent merchants and its core clientele of small businesses.
Square’s two significant business parts make it that more exciting. Cash App is up first – having an active user base that has doubly increased yearly. It has virtually shown unlimited potential in building out the financial offerings it serves to its consumers. The other one is Square Online Store – a blossoming, yet fast-growing platform that aids Square’s merchants with an omnichannel presence built out for them. This app also helps in facilitating curbside pickup, which could potentially become one major growth catalyst as we slowly recover from the COVID-19 pandemic.
Payment and credit services stocks are some of the key players in the fin-tech sector.
Final Thoughts on Fintech Stocks
With an equal serving of financial and technical innovations, there is no doubt that fintech stocks are the new frontier in terms of both the economic and technological worlds. So, invest now in these stocks – indeed, it will give you a double dose of the best of both worlds, all aiming to help you progress further in improving your portfolio.
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Fintech Companies in Canada
Fintech companies offer consumers opportunities to invest in cryptocurrencies that banks do not have. Companies in the financial industry must meet the stringent requirements of regulators such as the Securities and Exchange Commission to protect consumers.
The fintech market is attractive given the incredible growth potential of the 21st century. As demand for better financial technology grows, fintech companies are expected to lead the way with innovative offerings. As a result, you can bet that there will be a niche for these companies in the years to come.
Nothing prevents Nuvei and Mogo from being pioneers in fintech. If you don’t have time to enter the fintech market, invest in innovative products and services.
As tech startups come and go, companies that combine finance with technology hold their breath and attract investors. As a result, the use of financial technology (fintech) is on the rise in Canada, and with partnerships with Canadian banks, some Canadian fintech stocks are listed here.
Fintech platforms contribute to the democratization of financial services by making it cheaper and more convenient to do financial tasks and accelerating the digital transformation. Technological growth is forcing companies to offer a range of financial services on fewer screens and taps. Our fintech strategy aims to deliver attractive returns on invested capital to help our existing financial services companies transform their models.
Our next best fintech company is Mobi724, a global solution provider that provides digital incentives such as card linking and digital marketing, including mobile payments, loyalty programs and data analytics.
Lightspeed POS is one of the top technology stocks of the TSX, and its primary offering is its omnichannel sales software as a service (SaaS) platform for commercial transactions. The Vancouver-based company offers a cloud-based multichannel trading platform for companies of all sizes. In addition, as one of Canada’s largest e-commerce platforms, Shopify offers its customers fintech services to measure and scale up their customers “digital activities.
Mogo is a company that intends to implement significant and radical changes this year with many benefits. The company expects sales growth of 100-110% year-on-year until the end of 2021.
Here’s what Mackie Research analyst Nikhil Thadani had to say about Mogo’s Partner Credit Model that the analyst views as a critical revenue driver for the future company. “Mogo has announced a partnership (s) in asset management at the end of 2019,” the analyst wrote in a quarterly update to clients last month. We suggest that this could open up some growth opportunities, most likely in 2020.
The company will be added to the S & P / TSX Composite Index, Canada’s benchmark stock index, on Monday, June 21. The Vancouver-based company debuted at Toronto Stock Exchange (TSX) in June 2015. The Ontario-based companies are also listed on the New York Stock Exchange and the TSX.
They bought Carta, a digital payments company, which played a role in introducing P2P services in the first quarter, which I think is enormous. The Vancouver-based company provides personal finance and money management services through its application. According to its website, it is a technology company that provides Canadians with a better financial experience.
They allow their users to draw on more than twenty years of corporate archives and records, as well as real-time news reports. Remitbee is an online money transfer company that prides itself on being Canadian, and they cite themselves as a reason to work for them. There’s a wave of names in that wave, from technology companies to financial companies, and every second in between.
Analysts looking at Cantech letters have found some Canadian fintech stocks that deserve your attention. We have filtered hundreds of Canadian financial technology companies with bright futures and placed them on this list to spare you the time to search. The last company on the list is the fintech app.
Canadian investors, especially millennials, may find fintech stocks to their liking on the TSX. However, if you want to invest in 2021, these seven fintech stocks are the key to success. Here, startups and incumbents operate under a single FinTech sub-category.
While Canada does not get the same praise for innovation and technological development as the United States, it still outperforms its weight for emerging financial technology companies (fintech). For example, PayPal was one of the first Fintech companies to materialize and prove its place in the financial industry.
Its subsidiary Carta Carta, a modern issuing platform for cards, began offering innovative card products to its initial customer group in the first quarter of 2021 and plans to expand its customer base to banks and fintech companies in the coming quarters. PayFirma, founded by Michael Gokturk in 2010, is a payment processing company based in Vancouver with the vision of making customers pay on time. Finally, GoldMoney is another fintech company, as it is on a mission to make gold and precious metals more accessible.
In 2015, Dundee Capital Markets, a subsidiary of the Dundee Corporation (DDEJF), supported the company with a $1.3 million investment. On December 23, 2020, Canadian financial technology company Mogo announced its plan to invest 15% of its reserves in Bitcoin until the end of the year.
His fintech project, Capital Cube, provides essential research tools in addition to stock screeners and business knowledge and analysis. For example, you can open market data in a new tab of Barchart Solutions. In addition, Toronto-based Quandl operates a platform for alternative financial and economic data.
Here are 12 fintech stocks traded on Canadian exchanges for investors who (in alphabetical order) are seeking to enter this fast-growing sector with a market capitalization between C $10 million and C $500 million.
The technology company generates most of its revenue from the US market but is also active in the European Union, the United Kingdom and other countries with operational markets. Nuvei shares are trading with a market capitalization of $6.9 billion, meaning they exceed the price-to-sales multiple of 2.8, suggesting a sky-high valuation.