Scotiabank is gearing up for a major push into the tech financing markets in Toronto, Vancouver and Montreal.
The bank is looking to lend money to companies from seed-stage to large firms and increase its profile in those cities’ tech communities. It’s also building a tech team responsible for competing for deals in excess of $25 million outside those three cities.
Scotiabank’s tech push comes as competition in the industry intensifies. In July, The Logic reported that Silicon Valley Bank (SVB) was expanding its life-sciences, venture-capital and private-equity businesses in Canada. Deal rivalry is also up. Earlier this year, CIBC gave Montreal tech firm Lightspeed a US$55-million credit facility, replacing a US$15-million line-of-credit from SVB.
Scotiabank’s push puts it in direct competition with a number of other large financial institutions, including Silicon Valley Bank (SVB), National Bank and CIBC, which have sizable presences in Canada’s tech market.
The bank is hiring ventures principals in each of the three cities. They will be tasked with building out tech practices and increasing Scotiabank’s market share in “the early and growth-stage technology and innovation segment,” according to job postings for the roles.
“This developing practice is designed to meet the current and evolving needs of this fast-growing industry, from seed stage through to Capital Market requirements,” read the postings.
Scotiabank declined to comment for this story. None of the analysts covering the bank whom The Logic contacted about Scotiabank’s move were willing to comment.
Software-as-a-service financing models are listed as a focus area, as are contract financing and research-and-development tax credits. The hires are also expected to develop relationships with local venture capital investors and “cultivate and increase Scotiabank’s brand profile in the tech community.”
Scotiabank’s tech push comes as competition in the industry intensifies. In July, The Logic reported SVB was expanding its life-sciences, venture-capital and private-equity businesses in Canada. Deal rivalry is also up. Earlier this year, CIBC gave Montreal tech firm Lightspeed a US$55-million credit facility, replacing a US$15-million line-of-credit from SVB.
CIBC and National Bank dominate the market, according to the small fraction of deals which are publicly disclosed. The banks were involved in five Canadian tech-financing deals each so far this year, data compiled by the Canadian Venture Capital and Private Equity Association shows. SVB did three deals. HSBC, TD and Scotiabank did one each.
However, that one Scotiabank deal is the largest venture capital financing in Canadian history. In September, the bank provided debt financing for Newfoundland-based Verafin’s $515-million investment round. The same month, Scotiabank partnered with Espresso Capital to host a startup cocktail party at Toronto’s Elevate tech conference.
Scotiabank’s tech involvement has increased significantly since April, when the firm hired National Bank executive David Rozin to be its new vice-president and head of technology and innovation banking (TIB). Rozin led National’s tech-financing practice in Ontario and much of English Canada for a little over a year.
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Now, it appears he’s looking to build an even more ambitious practice at Scotiabank. All the job postings—including those for senior staff without a regional focus but based in Toronto—are nestled under Rozin’s TIB division. The bank is hiring a customer success manager to offer “clients with advice for their day to day banking operations.”
It’s also looking for a director and a senior manager focused on structuring and data. The latter is tasked with structuring and preparing financing between $1 million and $25 million for the TIB team. In addition, they’re tasked with helping generate profits and acting “as a structuring subject matter expert to our National Accounts team for opportunities within the Technology and Innovation segments with exposures greater than $25MM and regions with absence of TIB expertise,” according to the posting.