One of the longest-serving CEOs of a major Canadian tech firm is stepping down from the helm of the company he founded 22 years ago.

Al Karim Somji is leaving the top job at Vancouver-based financial software firm Zafin, effective immediately. He is succeeded by Charbel Safadi, who joined Zafin in January 2023 and served as group president since December.

The leadership change comes two months after Swedish private equity firm Nordic Capital bought a majority stake in Zafin for an undisclosed amount and after the company paused plans to go public. 

“This was Karim’s vision,” said Safadi. “It just made sense for him in terms of timing.” 

Safadi told The Logic his hire was part of the company’s succession plan. He said 85 per cent of the company had already reported to him as group president, including the product, customer enablement and human resources teams. As CEO Safadi will maintain those responsibilities while adding other reports, including the chief operations officer, chief revenue officer and chief financial officer. 

Somji will remain involved in Zafin as a director on the board, the company said in a press release. A spokesperson for Somji said he was not available for an interview.

The leadership transition comes during a period of hyper-growth for Zafin, Safadi said. The company is private and does not disclose details of its financial performance, but the new CEO said the firm’s revenue has been growing at more than 50 per cent in recent years and he expects that rate to continue. “The reason we say this is [because] banks have to modernize their process,” said Safadi. “There is a necessity.”

Zafin’s software helps banks update the operation of their products and services. Under legacy systems, these offerings typically exist in silos across a bank. Zafin pulls those products, services and accounts onto one platform, making them easier to manage. 

Modernizing that infrastructure is now viewed as essential for banks in a world where fintech companies threaten to disrupt the industry. 

Under Somji’s leadership, Zafin had been quietly toiling in the banking modernization space for the past two decades. It works with three of Canada’s largest five banks, as well as some of the largest banks outside the country, including HSBC and ING bank. The firm has around 700 employees in offices around the world, including in Canada, the U.S., Europe and Australia, Safadi said, as well as development centres in India and Ottawa. 

The capital injection from Nordic’s acquisition will help propel Zafin’s growth, said Safadi. “It gives us the opportunity to effectively put more fuel to the fire, in terms of how we’re already growing as an organization.” 

Safadi wouldn’t disclose terms of the deal with Nordic, which is also a private firm. The Globe and Mail reported in February that the acquisition valued Zafin at more than US$500 million based on annual revenues of between US$75 million and US$100 million. “I can’t confirm or deny that,” Safadi told The Logic. 

Nordic, which manages €30 billion ($43.8 billion) in assets across its funds, has made several acquisitions in the banking technology space in recent months. Dinesh Krishnan, one of the other two co-founders, said Nordic’s purchase gives Zafin capital to do more acquisitions of its own. “It provides Zafin with an opportunity to continue to invest in industry-leading technologies,” he said in an email, “such as analytics and AI, to further differentiate our platform and capabilities, and meet the demands of banking clients globally.” 

Somji’s departure as CEO marks the end of a chapter for Zafin, said Safadi. But the overall strategy of the company isn’t changing much. “For the most part, the management team is staying intact,” said Safadi, noting that co-founders Anugopal Venugopalan and Krishnan will remain at the company. “Our strategy is very clear and very defined, we just want to accelerate and continue to grow that.” 

The firm has, however, paused plans to go public. Somji told The Logic in 2022 that he was planning an initial public offering for a 2023 listing. “It’s not part of our strategy at this time,” Safadi said this week. “As we evolve as a company, as our growth evolves, Nordic may assess that in the future,” he said.