AWARD SPOTLIGHT: Luge Capital ‑ Winner of CVCA's 2022 VC Regional Impact Award for Eastern Canada for Flinks
When a trio of entrepreneurs founded Flinks in 2016, it was to build a technology platform that would help connect consumers’ bank accounts to financial applications.
Founders Yves-Gabriel Leboeuf, Frédérick Lavoie, and Julien Cousineau built an open-banking infrastructure to enable apps to connect with consumer bank accounts to verify account information and access banking history – with the consumer’s consent, of course.
The product launched in 2017, around the same time the fintech sector started to gain traction. The Flinks’ founders knew they were on to something and sought out financing to improve and expand the platform.
In 2018, the Montreal-based company closed a $1.75M seed round, led by Luge Capital alongside the National Bank of Canada, which supercharged its growth, including hiring a few dozen more people to make it happen. A $16.2M Series A followed a year later, which helped the company continue its expansion, including a launch in the U.S.
In August 2021, Flinks announced a $103M investment from National Bank, including $30M in growth capital to fast-track its expansion across North America. The transaction provided National Bank with an 80% preferred share equity interest in the company.
“Flinks is strategically positioned at a key moment in the evolution of customer experiences,” National Bank CEO Louis Vachon said in a release announcing the deal. “The combination of talent and data technology solutions that Flinks boasts put them in a good position to capture the opportunities offered by a high-growth marketplace in North America.”
The deal was awarded the CVCA’s VC Regional Impact Award for Eastern Canada. Since the initial investment by Luge Capital and National Bank in June 2018, Flinks has grown its full-time employee headcount in Canada from 27 to 150 employees, or a 54% annual growth in headcount. Following the injection of new capital last year, Flinks plans to double its headcount to deliver on the growing need for better, more actionable financial data.
Leboeuf says the new investment resources help it meet the rapidly rising demand for financial data among fintechs, asset managers, credit unions, and banks; and will support an expansion into the wealth management and lending spaces.
He credits the early investments from National Bank and Luge Capital for helping the company get to where it is today. “And it was way more than money,” he says.
He says Luge Capital brought startup experience, mentorship, connections, and clout to the fintech.
“It enabled us to reach a point where a larger organization like National Bank felt comfortable partnering with Flinks,” he says.
About one-third of Canadians have connected their bank accounts with Flinks, which has processed more than 300 million connections to date, Leboeuf says.
During the COVID-19 pandemic, Flinks became a critical infrastructure for the financial services industry. With its Open Banking Environment (OBE), the company is also a leader, launched in partnership with National Bank, which seeks to bridge the gap between fintech companies and consumer financial data.
Karim Gillani, a general partner at Luge Capital, first met Flinks when he was a senior M&A executive at PayPal. So, when he co-founded Luge Capital in early 2018, he re-engaged the fintech, and it became the firm’s first investment.
“We saw a big opportunity for Flinks to be the underlying utility company for the financial services sector in Canada,” Gillani says, likening it to owning the plumbing that delivers water to houses across the country.
Gillani also saw a strong team that had built a robust product with minimal resources. “And they moved quickly,” says Gillani, who also became a member of the Flinks’ board until his firm’s exit last year.
The Luge team helped Flinks source talent and think through key areas such as product development, corporate strategy, and financial planning.
“We were very active with the company on an ongoing basis from the time we made the initial investment to the exit,” Gillani says.
And while the pandemic was a catalyst for growth in the fintech sector, Gillani says Flinks was ready for the sudden surge in online activity.
“When the pandemic hit and there was a significant drive towards the digitization of financial services, the company was well-positioned to serve the ecosystem,” he says. “They had built the right infrastructure, scaled it correctly and had already embedded a bunch of services. So that when there was a mass move to the digital world, Flinks was right there, ready to support it.”
Flinks has grown to become a prominent name in Canada’s fintech space and, more broadly, in the Canadian tech ecosystem, Gillani adds.
“The Flinks team has proven that Canadian companies have earned the right and the opportunity to grow and become influential – and very quickly,” Gillani says. “It’s a demonstration that Canadian companies can make it big. It’s not just a Flinks story; it’s a Canadian ecosystem story.”