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Andre Desmarais, left, and Paul Desmarais Jr. of Power Financial Corp. are shown in this 2014 file photo. Paul Desmarais Jr. has been among the early adopters investing in the fintech space.

Peter Mccabe/THE CANADIAN PRESS

Power Financial Corp. is pouring more dollars into Canada's financial technology industry with its third investment in just less than a year.

The details have yet to be released, but industry sources confirm that Power Financial will be investing an undisclosed amount in a mobile money application developed by Koho Financial Inc.

"We are in the process of raising a round and Power is participating in that round," said Daniel Eberhard, co-founder and chief executive officer of Koho, who would not disclose how much funding the company is looking to raise.

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Power Financial declined to comment on the investment, but Paul Desmarais Jr., co-chairman of Power Financial, has been among the early adopters investing in the fintech space. Last April, the company invested $30-million in robo-adviser Wealthsimple, and earlier this year Power Financial joined Equitable Bank and Hedgewood Inc. in a $6.4-million investment in online lender Borrowell Inc.

Power Financial has yet to say whether the fintech companies they have already invested in will be integrated with its existing financial-services companies – which involve a number of major players in the money-management landscape, including Great-West Lifeco Inc. and IGM Financial Inc. (which houses financial advisers in both Investors Group Inc. and Investment Planning Counsel).

In addition, IGM Financial is the parent of investment management firm Mackenzie Financial Corp. – which is set to launch a suite of exchange-traded funds this spring. (ETFs are commonly used building blocks in the portfolio construction of robo-advisers.)

This is the second round of fundraising for Koho – which is still open to accepting new investors and has already attracted investments from Scott Lake, founder and former CEO of Shopify Inc., and Adam Felesky, former CEO of Horizons ETF Management (Canada) Inc., in addition to Power Financial.

"The success of fintech firms will be dependent on minimizing their customer acquisition costs," Mr. Felesky said in an e-mail. "Koho has a simple and attractive financial product, which we believe will be sought out. The company is at the front lines of building the future financial ecosystem as this customer base can then be offered other solutions – whether in-house or through other fintech partnerships."

Last year, Koho completed its first round of fundraising, which raised $1-million, and had the backing of several well-known industry veterans: Joe Canavan, former CEO of Assante Wealth Management Ltd. and investor in robo-adviser Wealthsimple; Lloyd Craig, former CEO of Coast Capital Savings Credit Union; and Gil Penchina, a major Silicon Valley investor who has been involved with U.S. robo-adviser Wealthfront, as well as LinkedIn Corp. and PayPal Inc.

Koho is not a chartered bank, which is why it has partnered with Vancouver-based Peoples Trust Co. to hold cash. Koho provides clients a mobile application that allows them to conduct day-to-day financial transactions that include direct deposits, purchases, ATM withdrawals, bill payments and electronic money transfers – all free.

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Users can deposit money using direct deposit, e-transfers or online via their Web portal. In addition, the app also allows users to set up automatic budgeting and savings goals. The company launched its website last fall and has more than 6,000 clients on its waiting list.

Koho makes its money when purchases are made on a prepaid card. A portion of the purchase – called interchange – is paid directly by the merchant to Koho. It usually works out to about 1.5 per cent of the total amount of the purchase.

Among the larger financial institutions in Canada, Power Financial is not the only one keeping a close eye on fintech players. Earlier this year, Canadian Imperial Bank of Commerce, First West Credit Union and Meridian Credit Union each partnered with fintech operations.

Last week, Toronto-Dominion Bank CEO Bharat Masrani said he would like to see regulators step into the fintech arena, suggesting they have an unfair advantage over traditional banks because they are not subject to the same rules.

With files from banking reporter David Berman

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