The question posed in the slogan of Neo Financial’s new marketing campaign shows that the FinTech startup is clearly positioning itself against Canada’s big banks.
But the company’s newest product launch and broader roadmap continue to put upstart Neo in competition with both the incumbent big banks and fellow challengers like Wealthsimple and Questrade.
The three-year-old startup has been vocal about its plans to take on Canada’s incumbent financial giants by creating a full suite of FinTech products. Today, the company officially launches its new product, Neo Invest.
Neo Invest is an actively managed investment platform: unlike robo-advisors like Wealthsimple, Neo has built a digital investing platform that will be managed by professional money managers.
Neo Invest will allow consumers to start investing with as little as $1, and to customize their portfolios based on goals and risk comfort. The platform will allow for investments in cryptocurrencies, real estate and infrastructure funds, and other hedge fund-like strategies.
Neo is able to launch its investment platform through a partnership with startup OneVest, which will manage the portfolios, according to Neo co-founder and CEO Andrew Chau. The fellow Harvest Builders company is a wealth and asset management startup, which allows FinTechs and financial institutions to build on its customized wealth management tech.
OneVest is a registered portfolio manager in each Canadian province and territory, and an investment fund manager in Alberta, Ontario, Newfoundland and Labrador, and Quebec. Registered Investment Industry Regulatory Organization of Canada (IIROC) investment dealer CI Investment Services holds the assets in OneVest accounts.
Chau told BetaKit that the decision to launch an actively managed digital investment platform was very deliberate, noting that all other digital investing platforms are focused on automatic investing, a DIY approach, or a blend of both. Chau called active management a differentiator in a world of robo-advisors and bank-run mutual funds with high fees.
The idea for Neo Invest, he said, is to give Canadians access to types of investments that are typically reserved for high-net-worth individuals. Chau called the investment platform the most-asked-for product from Neo customers.
The investment platform adds a third prong to Neo’s product line, including a savings account and credit card. Neo’s interest in some of the main products offered by banks – savings, spending, and credit – is an approach that has been taken by other Canadian FinTech startups like Koho as means to find product-market fit.
Chau has been clear from the beginning about his intention to make Neo a full-service digital bank. “The way we can have the biggest impact is by truly owning the entire [financial] stack,” said Chau, speaking with BetaKit after securing $64 million CAD in the fall.
Much like Wealthsimple, which started out with an investment platform and has since grown into saving, crypto, and taxes, Neo is actively working to broaden its scope. Chau called what Neo offers today “just scratching the surface.”
The next product on Neo’s roadmap appears to be mortgages. Chau noted that Neo Mortgage is still “under development,” and declined to share any additional details. However, Neo’s website indicates that the startup has already secured a handful of mortgage lending partners, including CMLS Financial and Home Trust. Late last year, Neo also hired mortgage professional Wayne Kainu as its head of mortgages.
A mortgage product would also put Neo in more direct competition with Questrade, which launched its mortgage product earlier this year. Wealthsimple CEO Michael Katchen has also teased mortgages as something that is on his company’s product roadmap – though mortgages might be one feature where Wealthsimple enters the market after Neo and Questrade.
In addition to investing and mortgages, Neo’s CEO has also discussed adding retirement planning to its platform. Shawn Abbott, co-founder and partner at Inovia Capital (a Neo investor) has indicated that Neo is also exploring crypto – something that would only move it closer to Wealthsimple (also an Inovia portfolio company), which is currently running an extensive ad campaign in Canada focused on its Wealthsimple Crypto app
While Neo might soon be fighting Wealthsimple and Questrade on two fronts, the startup’s CEO has been open about the fact that he sees the real competition as banks. He noted that Canada’s Big Five Banks are still home to the lion’s share of consumers, which makes them Neo’s primary competition.
Speaking on the BetaKit podcast last year, Chau also claimed there is enough space for multiple players to exist. “The more choice we have the better off everyone ends off being,” he said.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
