Canadian mortgage technology company nesto has closed a CAD 302 million Series E financing round at a CAD 1.47 billion valuation, granting the Montréal-based company unicorn status. The round, announced on Wednesday, comprises CAD 107 million of primary capital and CAD 195 million of secondary capital, or approximately USD 216 million in total, according to FinTech Futures.
New investors in the round include La Caisse — formerly known as CDPQ — Fidelity Investments Canada ULC funds, PICTON Investments and Endeavor Catalyst. Existing shareholders Portage, Diagram, NAventures (National Bank of Canada's corporate venture capital arm), Fonds de solidarité FTQ and Fondaction also took part in the round.
SCALING THE AI LENDING PLATFORM
nesto said the new capital will accelerate the development of its technology and AI capabilities, including the deployment of Nesto Cloud's AI-powered lending platform, and enable faster onboarding of partners and clients. The company recently launched Maestro AI, which it describes as an AI-native orchestration platform designed to simplify end-to-end mortgage operations. nesto describes itself as Canada's leading provider of mortgage technology and financing solutions.
BetaKit reported that Maestro AI is designed to complete mortgage underwriting in under two minutes, and that the company is shifting from direct-to-consumer lending towards providing white-label technology to Canadian financial institutions. nesto said it is also expanding beyond mortgages to bring AI-powered solutions to the broader financial services industry.
UNICORN STATUS FOR MONTRÉAL FINTECH
The CAD 1.47 billion valuation elevates nesto into the unicorn tier of privately held technology companies. Kim Thomassin, Executive Vice-President and Head of Québec at La Caisse, said nesto "stands out for its business model and innovative approach".
Nesto said it had more than CAD 37 billion in originations this year and manages over CAD 80 billion in mortgages under administration. The company said the capital would also enable faster partner and client onboarding. nesto operates primarily through its CMLS, nesto and Nesto Cloud brands, and says it is gaining market share in direct-to-consumer residential lending, in the broker market and in multi-family commercial lending. nesto puts the size of Canada's mortgage industry at CAD 2.1 trillion, citing CMHC data.