News

Canadian challenger bank Mogo to merge with fintech investment firm

April 16, 2019

Mogo Finance Technology Inc., a Canadian challenger bank, has entered an agreement to merge with Difference Capital Financial Inc., a specialty investment firm specializing in emerging technology and growth companies. The companies will be combined under the name Mogo Inc.

The agreement calls for each common share of Mogo to be exchanged for one share of Difference Capital, with Mogo shareholders owning 90 percent of the combined company. Upon completion of the transaction, all outstanding convertible securities of Mogo will be exercisable or convertible for shares of the combined entity.

The combined company will continue a Mogo strategy aimed at becoming the leading fintech platform in Canada. Mogo will have immediate access to between $9 million and $10 million in cash, as well as control over two recent investments by Difference Capital — in Hootsuite and Vision Critical — with a combined market value of about $24 million.

"This transaction enables Mogo to continue to invest in new products and innovation, building on our leadership position in the Canadian fintech space," Mogo founder and CEO David Feller said in the announcement.

Mogo, serves 800,000 members through an offering of six products, including a digital platinum prepaid Visa card, a digital mortgage product, a Mogo crypto account that allows its users to buy and sell bitcoin, free credit score monitoring and identity fraud protection.

David Feller will become chairman and CEO of the combined company; Greg Feller, currently president and CFO of Mogo Finance Technology, will become president, chief financial officer and director of the combined firm.

The respective boards of directors and special committees have agreed to the merger. Directors and certain shareholders of Mogo, representing 21.8 percent of the company’s outstanding shares, have indicated their support for the deal.