Fintech-focused venture capital firm Luge Capital has successfully raised $71 million for its second fund. The firm plans to invest in fintech startups in both the US and Canada. Returning investors, including CDPQ, Desjardins, BDC Capital, Sun Life, Industrial Alliance Financial Group (iA), and Fonds de solidarité FTQ, have participated in the funding round. Additionally, Inovia Discovery Fund I has joined as a new investor.
Luge Capital, established in 2018, is an early-stage VC firm that mainly invests in fintech companies. Headquartered in Montréal and Toronto, the firm boasts a solid base of limited partners (LPs), which consists of large financial institutions, insurance carriers, and pension funds.
The firm is broadening its investment focus to include “verticalized” fintech startups that operate at the intersection of financial services and other major industries, such as environmental, social, and ESG startups.
David Nault, General Partner at Luge Capital, emphasized the unique insights gained from their partnerships, which in turn give the team a competitive advantage when it comes to supporting fintech founders.
Karim Gillani, General Partner at Luge Capital, highlighted the need for modernization in large financial institutions. He stated that, despite financial services playing a significant role in people’s lives, these institutions often struggle to update their legacy technology. By investing in high-quality fintech founders who are solving the industry’s most pressing challenges, Gillani believes Luge is driving innovation in the financial services sector, which accounts for 20 percent of the GDP in both the US and Canada.
In its first fund, Luge Capital invested in 21 companies, raising approximately $85 million. Some notable investments include Flinks (acquired by National Bank of Canada in 2021), Plooto, Owl, Flare, and OneVest.
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