OMERS backed Purpose Financial to acquire Thinking Capital

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By Ted Liu

Purpose Financial LP, a portfolio company of OMERS Platform Investments, has agreed to acquire Thinking Capital Financial Corporation from TorQuest Partners and Jeff Mitelman.

Thinking Capital will retain its headquarters in Montreal and all employees will remain with the company. Mitelman will become a Managing Partner of Purpose Financial and will retain a meaningful equity position in Purpose Financial alongside TorQuest and Thinking Capital’s management.

Toronto based Purpose Financial LP is the parent company of Purpose Investments, Purpose Advisor Solutions, and Purpose Innovation Labs.

OMERS Platform Investments acquired a minority interest in Purpose Investments Inc. in May 2017.

TorQuest Partners Fund III acquired a majority stake in Thinking Capital Financial Corporation in 2014.

The combination of Thinking Capital and Purpose Financial will create a business with significant balance sheet strength, strong financial backing, and a diversified funding model. This model will fuel Thinking Capital’s originations growth through improved access to capital at a reduced cost. In addition, the combination of direct originations with asset management offers the potential to create unique investment products.

“Purpose Financial has an unrelenting focus on building innovative, technology-driven financial solutions,” said Som Seif, Chief Executive Officer of Purpose Financial. “Thinking Capital is a clear leader in the small- to medium-sized (SME) business lending space, with credit adjudication technology and presence that are unmatched in the Canadian market. This acquisition brings together leading origination, asset management, and technology platforms as a unified entity, and enables us to bolster our product capabilities and optimize the technology, distribution, and funding model of our combined business.”

Thinking Capital’s technology-driven approach to lending, as well as its strategic partnerships with banks, payment processors, credit bureaus, and leading brands, are redrawing the landscape for small business financing. Since the company’s inception in 2006, Thinking Capital has increased the size of the addressable market for SME credit by delivering more than $750 million in incremental funding to main street.

“While 98 percent of businesses in Canada are small businesses, many have limited access to capital to fund their growth. As an early innovator in this market, we have spent the last decade evolving the language of small businesses credit,” said Mitelman. “Under the Purpose Financial umbrella our time to market on product innovation and funding capacity will be greatly amplified. We look forward to the new possibilities our union will bring to the small business community.”

photo credit: Thinking Capital