June 1, 2019 /NCFA/ – What is your background, and how did you come to co-found Luge Capital?
Karim: My background is in fintech, mobile tech, engineering, finance and strategy. Prior to Luge, I was at PayPal, leading M&A activities in Canada. I joined PayPal through its $890M acquisition of Xoom, a renowned cross-border remittance company, where I started the Corporate Development practice. I have an Engineering degree from the University of Waterloo, a Master of Finance degree from the University of London and a Master of Laws from the University of Toronto.
Luge Capital was the byproduct of highly motivated LPs, and a recognition that fintech venture capital needed a kickstart at the early stages. David Nault and I co-founded Luge in early 2018 with a new model to seek out entrepreneurs in the US and Canada that not only had a drive to take over the world, but also built their product to reflect that inevitability. We spend a lot of time with our companies because we believe our experience as former operators can be valuable, and we’ve architected a fund that is collaborative with our LPs.
How have you seen the Canadian fintech ecosystem change in the past 5 years? How has the Canadian fintech ecosystem evolved?
Karim:
- In the last five years, we’ve seen the emergence of fintech companies expand. Since 2013, between 70 and 100 new fintech companies are founded in Canada every year. Prior to 2011, it was about 20 per year. Payments continues to lead all other categories, but we’ve seen meaningful emergence of crypto-focused companies in the last two years.
- We’ve also seen systematic maturing of entrepreneurs in financial services. There is a greater understanding for the nuances of specific industries, and bigger ambitions to tackle problems that are global in nature.
- The big banks have set up formal structures internally to talk to fintech companies, engage in pilots, become customers and invest directly.
- There is more capital available now than 5 years ago for talented founders at almost all stages. With the entrance of Luge as a fintech-focused investor, there is even more money for early stage companies that need support to see their products take off. We’ve also seen capital inflow from America VCs who are realizing the tremendous calibre of our Canadian founders.
How can we strengthen and grow the Canadian fintech ecosystem?