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Existing anchor investor Portag3 Ventures—the fintech arm of Power Financial—led the investment in Diagram, which uses its money to co-found new businesses with entrepreneurs in financial services, health care and insurance. Angela Strange, a partner at Andreessen Horowitz, and Bruce Heyman, the former U.S. ambassador to Canada and former managing director of Goldman Sachs, were among the high-profile angel investors who also participated in the fund. (Financial Post)

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Talking point: Access to Diagram’s portfolio companies could help Power’s core insurance operations understand what new technologies to apply to their businesses. In the past, the firms have also matched up the startups in which they have invested to increase their chances of finding customers. In 2017, one of Diagram’s first investments, Dialogue, integrated its service—which allows customers’ employees to chat with doctors—with benefits platform League, a Power Financial portfolio company. A year later, Power Corp. subsidiary Great-West Life launched Dialogue to employers across Canada. Power and its subsidiaries own robo-adviser Wealthsimple, while Portag3 has invested in digital account service Koho and Borrowell, which provides credit scores and facilitates personal loans. The startups in Diagram’s second fund could benefit from the customer base of those existing scale-ups.

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Vice-president Paul Desmarais III, scion of the family that founded Power, believes the continent’s sizeable markets and favourable regulatory regimes are fertile territory for the nearly century-old company. (La Presse)

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Talking point: In a speech touting Power’s investments, Desmarais III suggested Portag3 Ventures, the company’s early-stage fintech investment firm with some $427 million at its disposal through its second fund, is looking to expand its European holdings. Such expansions would be a major move for the younger Desmarais, whose father and uncle recently stepped down as co-CEOs of Power—and who, given his education and pedigree, some observers believe is destined to take the top job one day. The 37-year-old has been increasingly critical of the fees charged by Canada’s big banks—and for regulations that he said stymie fintech development in the country.

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Portag3 Ventures, a VC firm controlled by Power, intends to invest half the funds in North America, 40 per cent in Europe and 10 per cent elsewhere. (The Logic)

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Talking point: In 2016, Portag3 created a fintech fund backed exclusively by firms associated with Power. This new fund brought in money from over 20 investors, including the Public Sector Pension Investment Board and the Caisse de dépôt et placement du Québec. In August, The Logic reported the Caisse was planning a $2-billion fund focused on “disruptive technologies.” International firms Aviva France, Israel-based Harel Insurance & Finance and Silicon Valley-based NSV Wolf Capital also invested. Power was an early investor in many of the most prominent Canadian fintechs, including League, Clearbanc, Wave and Wealthsimple. In May, The Logic reported Power had an 88.6 per cent voting interest in the last firm. With its new fund, Portag3 will limit itself to ownership stakes of 10 to 20 per cent.

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An online loan provider that offers Canadians free credit-score reports has raised an additional $20 million in equity and venture debt funding, co-led by Power Financial’s Portag3 Ventures and White Star Capital, which participated in its Series A. Silicon Valley Bank, Clocktower Technology Ventures and Argo Ventures also participated in the venture debt funding round. The company, which launched in 2015, said it has surpassed a million users. (Globe and Mail)

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Talking point: The funding round bolsters Power and its subsidiaries’ growing portfolio of Canadian fintechs. In May, Wealthsimple announced a $100-million fund raise, $30 million of which came from Power—which, along with its subsidiaries Portag3 and IGM, owns a 88.6 per cent stake in the robo-adviser. And, last week, Portage3 led a $55-million round in Diagram Ventures, which helps launch fintech companies. Power’s interest is at odds with the trends in the sector. An April report from Fintech Growth Syndicate found that the number of new fintechs in Canada is slowing and that the number and size of deals in Toronto remained low, relative to other financial centres. A report from EY, meanwhile, found low adoption rates compared to other countries, with only 18 per cent of Canadians saying they used at least two fintech services during a six-month period in 2017, compared to 33 per cent globally.

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Manulife wants to attract millennial customers from Canada’s Big Five banks with new digital products, including a cash-back credit card, a high-interest savings account, an unlimited-transaction chequing account and travel insurance. The firm is also is waiving its $10 monthly fee for each month customers add $100 or more to their savings. (Financial Post)

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Talking point: Manulife Bank has been around for 25 years, but it’s never been able to take much market share away from the Big Five, as 80 per cent of millennials have an account with one of them, according to Manulife Bank CEO Rick Lunny. Lunny is hoping that this new package can help his firm take market share away from those banks. However, Manulife is far from the only one looking to sign up customers by offering digital banking services. In April, the credit union Meridian launched Motusbank, which offers online bank accounts and mortgage lending. Insurance giant Power Corporation has backed Toronto-based startup Koho through its fintech fund, Portag3 Ventures. Koho provides a digital bank account linked to a prepaid card, automates savings for customers and offers cash back for groceries, travel and dining out.

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The Montreal-based financial services giant launched Sagard Healthcare Royalty Partners to invest in pharmaceutical intellectual property (IP). The new fund will be led by David MacNaughtan (not to be confused with Canada’s U.S. ambassador, David MacNaughton), who previously held a similar role at the Canada Pension Plan Investment Board. (Globe and Mail)

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Talking point: Power Corp. capital mostly comes from its insurance businesses, but recently some of its subsidiaries have been acting as venture capital and private equity firms in IP-focused industries, particularly the technology sector. Through group companies, Power has controlling stakes in fintech startup Wealthsimple, and LED firm Lumenpulse. The group’s diversification into tech has been spearheaded by founding family scion Paul Desmarais III, who has a board or executive role at Power-backed VC firm Diagram, fintech fund Portag3 Ventures and Sagard Holdings, the new pharma fund’s parent company.