Holt Xchange | Jan Arp | Oct 7, 2021

During this year’s investment period, The Holt Xchange hyper-targeted 7 main verticals that deemed most promising: digital identity, regtech, insurtechs, cybersecurity, digital lending, wealthtech, and digital assets. As a result, this led to better targeted candidates and as such, a greater number of applications were a better fit for our investment program and Holt Ecosystem.

As a way to engage with fintechs in these verticals, Holt hosted the ‘Holt Invests’ Webinar Series featuring special Holt Advisors and alumni portfolio companies who are experts in this space. As such, we were able to engage in some engaging conversations as they shared first-hand insights on the current trend and opportunities.

The webinars consisted of the following:

1. The I AM Webinar explored trends and opportunities found within RegTech & Digital ID industries. It’s clear that compliance costs are surging and expected to continue this trend. For instance in 2018, businesses spent $1.3 million on average to meet compliance requirements and were expected to put in an additional $1.8 million (IAAP). In Europe, GDPR played a large role in compliance related cost increases for business, with more expected to come. Given Canada is moving forward nationally with programs like Bill C and provincially, such as Quebec’s Bill 64, we expect compliance costs in Canada to further continue. Additionally, FAbout 25% of all financial services applications are abandoned due to friction in the Know Your Customer (KYC) process, in part because current Identity Verification (IDV) procedures fail users. Need for consumers to support. To better prepare for these proposed legislative changes (ie. among many others), as well as support KYC / AML process, this year we invested in following regtech companies:
   1. RequirementOne com: Supercharge compliance power users and their ecosystem as Apple did for the mobile phone user.
   2. DigiPli com: We're redefining how financial institutions onboard customers by bundling a SaaS-based, end-to-end onboarding tool with ongoing support from AML experts.

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2. The I BORROW Webinar explored the opportunities and trends found within Digital Lending space. There continues to be an emergence of alternative lending options, pushing lenders to compete on price, demographics and ancillary product offerings. Additionally new offerings such as revenue base financing, and buy-now-pay-later, are received with greater comfort by investors and customers alike. As such, while looking into alternative financing options and recognizing the lack of options for first time buyers in a surging real-estate market, we invested in a new financing product of:
   1. FirstStep Financial ca: Opening the Door to Home Ownership. Digital Lending

3. The I EARN Webinar explored the opportunities and trends within Digital Assets, Investment & WealthTech industries. For instance, A survey conducted by the Alternative Investment Management Association and SS&C found that out of 100 global hedge fund managers, 69% of the market leaders use alternative data to boost performance. Also considering property earning assets, the real estate market showed no sign of slowing, and real estate sector funding appeared to be making a comeback early in the year, with VC funding to proptech companies growing 29% to $2.4B for Q1’21. Given the need for better solutions in trading and real-estate, we invested in:
   1. CityFalcon com: Using Big Data, AI, and NLP, we democratize access to financial content, personalize it, add analytics, and deliver it in real-time in 50+ languages. Capital Markets
   2. Reitium com: REITIUM is a blockchain real estate marketplace where everyone can be an investor starting with $100. PropTech

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3. While not a webinar in itself, the theme of I TRANSFER emerged throughout the series, focusing on payments and banking. Payments remains the largest attraction for VC investment, whereby funding for payments companies tripled compared to the previous quarter, with over $6 billion in funding. The number of deals (114) increased by 50%, with 18 mega-rounds accounting for over 75% of the total funding. From a banking side, according to Accenture, over 50% of banking tasks are still manually performed. By using technology, banks in North America can save more than 70 billion USD through 2025. Not only can technology improve the bottom line for banks, but we are witnessing better customer centric designs to better tailor and serve  niche demographics and communities. As such, we invested in the following payment and niche banking companies:
   1. Payzel com: Forged out of frustration we are building the GE Capital for Innovative Industries like cannabis. Digital Payments
   2. Phaze io: A prepaid payouts API for fintechs. Digital Payments
   3. PeopleHedge com(MAYBE)

The Holt Xchange has just invested in 8 of the best fintechs that build solutions for our society’s greatest challenges. They kicked-off their Growth Acceleration Program and are already in the process of working closely with the portfolio companies and leveraging their global advisory network to help drive their business growth.

“I am very excited to work with this year’s portfolio investments, complemented with 500+ Advisors, and to have the backing of key partners like Fairstone, RBC, MNP, BDC and Montreal International.”  stated founding managing partner Jan Arp.

If you are interested to learn more about us, or meet our portfolio companies or Advisors highly suggest you attend our Fintech Show 2021 either remotely or in-person: Fintech Show 2021.

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What’s Next for the Holt Xchange?  The Holt Fintech Show

• When: Tue Nov 16, 2021
• Where: Rialto Theatre (Montreal, QC)
• Agenda:
  • 6 PM - 7 PM: Doors Open
  • 7 PM - 8:15 PM: Fintech Show
  • 8:15 PM - 9:00 PM : After Show
• Tickets to register: https://bit.ly/3tdicJA

The world-famous Holt Fintech Show, in which our Holt 2021 Portfolio Companies will pitch their progress to date and share their next key milestones that the audience may want to get involved with, such as investing, partnerships, new clients, mentoring, etc.

This is a great networking opportunity for anyone looking to get more involved in the fintech ecosystem.

* If you can't make the in-person event, virtual options are available.

Join the LinkedIn event page here and remember to register a spot as spaces are limited!

About Holt XChange

Driving Canada’s Fintech leadership, The Holt Xchange is a global early-stage fintech fund headquartered in Montreal. Backed by Holdun, a 5th generation multi-family office, The Holt Xchange is focussed on building off of the legacy of Sir Herbert Holt. As the Holt family has done before, they are enabling Canada to take a technological lead in the next generation of financial services, known as Fintech. As Canada's most active seed fintech investor, Holt has spent the last year tracking over 10,000 early stage fintechs globally, soliciting the ones that presented a best match with their 500+ Advisor network, and then investing in the top 1% of applications globally, resulting in 35 investments to date.

This article is featured in NCFA's digital magazine, Fintech Confidential (Issue 4 Oct 2021). Click to read the latest thought leadership, insights and trends about Fintech in Canada:

Checkout NCFA's digital magazine, Fintech Confidential (Issue 4) --> here

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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