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Toronto serial tech entrepreneur Mike Serbinis has tapped a couple of Canadian corporate heavyweights to boost his latest startup.

League Inc., which is looking to disrupt the health benefits market, has raised $62-million in its latest venture financing deal, led by Telus Corp.’s venture capital arm and also backed by Canada’s billionaire Weston family – the controlling shareholders of George Weston Ltd. and Loblaw Cos. Ltd. – through their private holding company Wittington Investments.

“If you want to be on the podium, capital is not enough,” said Mr. Serbinis, on his latest financing. “We need to break through, and the formula of [investors who bring] strategic assets, capital and a big base of potential users was the right formula for us.”

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League Inc. founder Michael Serbinis speaks at The Globe and Mail Small Business Summit in Toronto in May, 2017.JENNIFER ROBERTS/The Globe and Mail

Past investors OMERS, Research in Motion co-founder Mike Lazaridis’s investment firm Infinite Potential Group, Royal Bank of Canada, Real Ventures and Business Development Bank of Canada also backed the deal.

League has now raised about $90-million, almost entirely from Canadian sources, a rarity for domestic tech firms that typically look abroad for big “growth capital” funding. Previous investors include Manulife Financial Corp. and Great-West Life Assurance Co. parent Power Corp. of Canada.

Mr. Serbinis started League in 2014, two years after his previous venture, e-reader maker Kobo Inc., was sold to Japanese e-commerce giant Rakuten Inc. for US$315-million.

League allows enterprises to offer competitive health benefits packages, aimed especially at digitally savvy millennials who make up an increasing share of the work force. The company partners with conventional underwriters to provide flexible, customized plans that let employees allot coverage as they choose, beyond traditional medical and dental plans. Employees can be reimbursed for services such as osteopathy, gym membership, yoga classes and even art therapy and food delivery. Reimbursements are handled over League’s online platform, where employees can buy goods and services from select vendors using their benefits accounts.

“They’ve developed a compelling digital platform that puts an emphasis on giving individual employees a lot of choice and that’s created a high level of member engagement,” Telus Ventures managing partner Rich Osborn said.

The company has hundreds of corporate customers in Canada and the United States, including Unilever Canada Inc., Shopify Inc. and Facebook Inc., and generates more than $10-million in annualized revenue, according to industry sources.

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Mr. Serbinis was originally looking to tap U.S. venture capitalists for his latest funding round when Inc. pushed into the market by partnering with Berkshire Hathaway Inc. and JPMorgan Chase & Co. to cut health care costs and improve services for its partners’ U.S. employees. The move slammed stocks of giant industry suppliers and prompted Mr. Serbinis, whose firm is expanding across Canada, the United States and into Europe, to change his fundraising strategy.

He instead decided to pursue “strategic” funding partners that could bring potential customers and partnerships to help expand League’s business. Telus, for example, sells electronic medical and health record services as well as electronic claims software to enterprise customers. “There’s an opportunity for us to integrate there, both for more seamless payments and removing friction in the health care system as well as building up personal healthcare records right within the walls of League’s app,” Mr. Serbinis said.

Mr. Osborn noted that while telecom and software giant Telus is now “purely” a venture investor, “over the longer term we’ll work with Mike and his team and our other partners and customers and figure a way to determine the best way we can create and capture value together.” Its Telus Health division focuses on health-related technology and computerized record-keeping systems, including benefits and pharmacy management products.

The Weston family empire, meanwhile, controls Shoppers Drug Mart and the PC Optimum loyalty program, both of which could benefit League. “It opens a lot of different potential for integration, including a built-in pharmacy in our app,” Mr. Serbinis said. “The idea of bolstering our programs and awards potentially with a loyalty program touchpoint presents a ton of opportunity.”

Wittington, through a George Weston spokesman, declined comment. Loblaw chairman and chief executive Galen G. Weston said at the company’s annual meeting in May that “connected health care” is a key strategic growth focus for the company in the coming years.

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