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Bank of Montreal will launch a new banking group focused on technology companies Tuesday, joining the growing ranks of financial-services companies servicing a sector they long deemed risky.

The Technology and Innovation Banking Group will be led by Andre Salvi, who most recently was a managing director focused on partnerships for the bank, including in financial technology; he will be joined by managing directors Devon Dayton and Deirdre Bergin.

The BMO group plans to provide services for all phases of the tech-firm life cycle, from early-stage startup needs to initial public offerings, while tying itself closely with the bank’s capital-markets and wealth-management divisions to service bigger companies and exiting shareholders.

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The Big Six Canadian banks largely shed dedicated tech-banking wings in the long tail of the dot-com bust and financial crisis last decade. But Canada has in recent years experienced a surge in tech startups and venture-capital investment, with U.S. firms such as Silicon Valley Bank – which recently got a formal licence in Canada – sometimes sweeping in to address financing needs. And in the past several years, Canadian banks have been quietly catching back up to the tech sector.

Bankers and startups have referred to this phenomenon as an “arms race” as banks retool to serve the maturing Canadian tech sector, building relationships with early- and mid-stage startups with hopes that another mammoth such as Shopify Inc. will emerge. When those companies seek debt financing, they’re increasingly finding more founder-friendly terms and lower costs of capital than even just a couple of years ago.

The arms race effectively began in January, 2018, when the Canadian Imperial Bank of Commerce bought the private specialty-finance firm Wellington Financial, aiming to better serve startups and scale-ups. It’s birthed a banking talent war, too: National Bank of Canada just recently lost two top tech bankers to CIBC and the Bank of Nova Scotia.

Mr. Dayton left CIBC a year ago, after being part of its recent technology push, to join BMO to deepen its own ties to the tech sector, which he says is growing twice as fast as the economy. “These businesses grow at an incredibly fast rate – we want to make sure that their banking experience is as least-disruptive as possible,” Mr. Dayton said in an interview this week. “And as they continue to grow, we want to keep pace with them.”

BMO has built a team of nine to oversee debt financing and commercial-banking advice for the tech sector, on top of its capital-markets team. Mr. Dayton also said the bank’s wealth-management team will be at the ready for tech clients, should founders’ and investors’ shares become liquid.

Through its U.S. subsidiary, BMO Harris Bank, BMO hopes to support American tech companies with its new tech division as well.

While Mr. Dayton declined to discuss what the final size or scope of the tech-banking team might look like when complete, job postings show that BMO hopes to hire leaders in the division in “six regions with high concentrations of technology activity.” It is also hiring a “portfolio manager” to source and work with tech clients who take on debt through BMO.

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