It was after a handful of credit card issuers exited the Canadian market, in the aftermath of the global financial crisis, that entrepreneur Peter Kalen decided to leave his corporate job and start Flexiti Financial Inc.
“I saw a void in the market for the provision of financing to the consumers of retailers that sell big-ticket goods like furniture and electronics,” says Kalen, who launched the Toronto-based company in 2014.
Kalen was also itching to become an entrepreneur after nearly a two-decade career working in retail and credit card divisions of companies such as Citigroup, President’s Choice Financial and Sears Canada.
“Admittedly, I was also starting to get tired of having bosses,” he says.
After purchasing TD Financing Services Inc.’s Canadian private-label credit card portfolio in 2018, Flexiti has expanded to become one of the country’s leading private-label credit card issuers. The company’s revenue has increased 3,200 per cent in last three years alone, Kalen says, through both the TD acquisition and by landing its own clients.
Flexiti provides consumer credit and point-of-sale financing at big-ticket retailers such as Birks, Kal Tire and The Brick. The company says it has more than 3,500 big-ticket retail partners in North America in categories such as automotive, electronics, furniture and appliances, jewelry and travel.
By offering credit directly to consumers, Flexiti says its clients are able to increase customer traffic, improve their shopping experience and gain repeat business. Its system is fully automated and can process customer loan applications in a few minutes, which simplifies the financing process and builds brand loyalty for its partner retailers. On its website, Flexiti says its retail partners have seen a 200-to-380-per cent growth in financed sales after joining its network.
Kalen describes himself as a “common-sense risk-taker,” but not a serial entrepreneur. Founding Flexiti is “something I had to do,” he says, given his history in the credit card business and the opportunity he saw in the market.
Building the company has been challenging, Kalen says, including navigating the complex financial services regulatory environment and securing funding to expand the business.
“It’s an extremely capital-intensive business. Our goods are money, so the more you grow, the more money you need,” Kalen says. “As we continue to add new merchant partners and expand our customer acquisition, you have to plan for a steady flow of funding.”
Flexiti’s loans are backed by Credit Suisse and its key equity partner is software company Globalive Technology Inc.
Building a company is also stressful given the responsibility for employees and their jobs, but also for investors’ money.
“I thought I had a stressful job in the corporate world [working for other people]. The stress of being an entrepreneur is next level,” Kalen says.
He credits hard work, a belief in his business model, and help from friends and family for getting through the tough times, to date.
“Perseverance is absolutely paramount. There have been many occasions where I should’ve walked away, but I refused to give up,” Kalen says, adding that he has no regrets. “I saw a market opening and went for it — and haven’t looked back.”
Advertising feature produced by Globe Content Studio. The Globe’s editorial department was not involved.