Financial-services giant Goldman Sachs Group Inc. is boosting its investment in Toronto-based fintech startup Financeit by an undisclosed amount, injecting cash that will allow the point-of-sale financing provider to make a new acquisition and expand into the United States.
The investment allows Goldman Sachs to become a majority owner of Financeit, company chief executive Michael Garrity said in an interview. Goldman Sachs was previously a minority shareholder of the startup, after contributing to an earlier financing as part of a lending syndicate.
Although the investment amount is not being disclosed, Mr. Garrity said it is "significantly greater" than the total of $50-million that the startup had previously raised.
The equity financing will help Financeit acquire Canadian software firm Centah Inc., which services the home-improvement industry.
Financeit launched in 2011 with the mission of helping merchants in the home-improvement, automotive and retail space sell large-ticket items by providing payment plans to customers. These point-of-sales plans have typically been provided by big banks or certain specialty lenders, Mr. Garrity said.
"It's an industry that's been dominated by people who used tricks and hidden language and special features that got triggered if you missed a loan payment, and all sorts of things that we don't believe in," Mr. Garrity said.
Financeit aims to provide consumers with greater transparency around rates by removing hidden fees, as well as bringing technology to modernize the sector.
Since launching, the fintech company has worked with more than 7,000 merchants and processed more than $1.9-billion (U.S.) in loan applications.
The acquisition of Centah, which does 80 per cent of its business in the United States, will take Financeit south of the border. Mr. Garrity says it's something that more Canadian fintechs should be doing.
"This country is a leader, globally, in financial technology," Mr. Garrity said. "One of the challenges is that we've had a tendency to build companies only to a certain level. Then they get attractive to some other company who buys them, usually in the U.S., and we end up with a little win, not a big one."