Shaking Up Canada’s $761B Mortgage Market with Pine

In an era when you can order food, book a flight or transfer money with a few clicks on your smartphone, industries that have yet to digitize stand out as antiquated. One of the largest industries in Canada that remains untouched by the digital revolution is the residential mortgage market.

To usher in a revolution in this $761B market*, we’ve decided to support Pine, a Toronto-based fintech company that takes the whole home buying and refinancing process online, saving consumers time and stress. We’re pleased to be one of the lead investors in a combined $27-million Seed and Series A financing round that will help the company launch across the country.

Pine Set to Disrupt Canadian Mortgages with $27M in Funding

There is an obvious appetite for new players in the mortgage space that can offer Canadians a transparent and easy alternative to the way things have been done for decades. Local fintech companies like Wealthsimple and Neo have proven they can successfully challenge the status quo. We believe Pine has crafted the right model to carve out a sizeable share of the Canadian residential mortgage loan industry.

Anything But Smooth

It is timely. With interest rates on a rising path, finding the best mortgage deal has gained a new urgency. But that journey is riddled with delays and inefficiencies.

I recently experienced these pain points when buying my first home. Communicating with a broker and making sure I was sending the right documents took days. Obtaining a good borrowing rate required multiple negotiations. During one of the worst phases of the pandemic, signing documents still had to be done in person. It was anything but smooth.

Pine’s process is radically simpler. Prospective buyers submit all their documents online, whenever convenient for them, and in under 10 minutes, learn if they are pre-approved. They get the best available rate without hidden fees, extra costs, or the need to shop around. At the finish line, they can sign digitally. Overall, the company has reduced the average standard processing time by two weeks.

A Strong Model

Pine can offer all this for two reasons. It doesn’t rely on a broker or other third party that charges a commission and takes care of everything on its own, from sourcing customers to lending. It also developed in-house technology for mortgage applications, marketing data, and underwriting. Some labour-intensive tasks, such as validating documents, have been automated, helping it keep costs low.

Another distinct strength is the combined experience of Pine’s co-founders. Justin Herlick worked at Blend, a U.S. company that developed software to process mortgages. Jonathan Shih has an extensive engineering background. They’re ready to take on the incumbents and build a better experience for all Canadian homeowners.

We believe Pine is best positioned to become a leader among digitally native mortgage lenders. The Canadian market is large enough to generate sizeable revenue flows to new entrants that can provide both the best rates and the best experience. Change is coming; I’m convinced the home buying process will feel much lighter for future owners.