Fintech Investor Interview: Karim Gillani, General Partner, Luge Capital

Luge Capital | Karim Gillani | June 2019

luge capital - Fintech Investor Interview:  Karim Gillani, General Partner, Luge CapitalIntro:  NCFA Fintech Confidential spoke with some of Canada’s experienced fintech investors, on their background, how Canada has evolved, what we should be doing, advice to fintech founders and what keeps them awake at night.  This is part 1 of a 4 part series.

 

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?

Karim:  Financial services accounts for approximately 20% of the Canadian economy, if you include real estate. It’s the single biggest sector in our country. And most of it still relies on old, archaic infrastructure. When you open a new bank account, an RESP account, or buy life insurance, the process is still driven by pen and paper. We need motivated entrepreneurs who have a deep understanding of the inefficiencies within financial services to overhaul how we interact with money and data. And we need those entrepreneurs to not only solve for Canada, but also for other geographies that suffer from the same (or worse) inefficiencies.

See: 

What advice would you give to Canadian fintechs competing globally?

Karim:  Solve the big problems and do it well. Strive to be the best in the world at what you do, otherwise someone else will push you out. Some founders don’t realize that with limited financial resources, you still have meaningful assets that can be leveraged to create value: passion, enthusiasm, time and industry experience. Never doubt that a small group of talented people can make a huge difference in the world.

 

What keeps you awake at night?

Karim:  Three things:

  1. The huge amounts of debt (especially student debt) that exists across North America. The US alone has $1.56 trillion of student debt across 44.7 million people, and $1.03 trillion of credit card debt across 197 million people.
  2. Approximately 1.7 billion people still don’t have access to a bank account, which would not only keep them safe from storing value in cash but would connect them to the formal financial system.
  3. Millennials are entering (or have recently entered) adulthood and are not able to save enough to become financially independent. Millennials are only saving 5.3% of their income on average, and 53% of the population between 21 and 37 still rely on their parents for financial assistance.

 

Karim yellow background low rez 200 - Fintech Investor Interview:  Karim Gillani, General Partner, Luge CapitalKarim Gillani, General Partner, Luge Capital

Karim has an extensive background in fintech, mobile tech, engineering, finance and strategy. Prior to Luge, Karim led Corporate Development for Xoom, a leading cross-border remittance company that was acquired by PayPal in 2015 for USD $890 million. Before that, Karim managed M&A and investment activities for BlackBerry in Silicon Valley. He developed the company’s overall strategy for mobile payments and commerce, including NFC payments, P2P and App World. Karim spent several years working for Redknee Solutions in the UK where he designed network infrastructure, including mobile money solutions, for carriers in East Africa and Western Europe.

 

More Canadian Fintech Investor Interviews in this 4 part series:


NCFA Jan 2018 resize - Fintech Investor Interview:  Karim Gillani, General Partner, Luge Capital 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

Latest news - Fintech Investor Interview:  Karim Gillani, General Partner, Luge CapitalFF Logo 400 v3 - Fintech Investor Interview:  Karim Gillani, General Partner, Luge Capitalcommunity social impact - Fintech Investor Interview:  Karim Gillani, General Partner, Luge Capital
NCFA Newsletter subscribe600 - Fintech Investor Interview:  Karim Gillani, General Partner, Luge Capital

NCFA Fintech Confidential Issue 2 FINAL COVER - Fintech Investor Interview:  Karim Gillani, General Partner, Luge Capital