Mogo, Moka, some Montreal players and the El Mocambo's Michael Wekerle

From zero to $50m exit in 4 years.

Last month, publicly traded fintech Mogo announced a deal to acquire Montreal savings roundup startup Moka (formerly Mylo) in exchange for 5 million shares.  Those shares are trading around $10, therefore valuing Moka at $50m.  As recently as November 2020, Moka was trading under $2.

I had been intrigued by Mogo, having noticed it had a million users, yet nowhere near the hype that Wealthsimple generates.  Moka brings in another 500k users, bringing the projected userbase to 1.7m.  Mogo's current market cap is over $500m.

Moka has $250m in AUM, yet generated $6.5m in revenues in 2020 - which would mean the clients collectively pay 2.6% annual fees on assets.  That's pretty high for a robo-advisor.  To be clear, they provide more services than just money management.

Moka/Mylo was only started in 2017 by Philip Barrar, so it's a pretty good quick hit for early backers.  The initial seed round was $2m followed by a $10m series A in 2019.  Those backers include some interesting Montreal people.  Most notable for me is Montreal tax superlawyer Robert Raich, former managing partner of Spiegel Sohmer.  He generates about $3.6m in annual billings.  He's definitely a creative lawyer: he once tried to have $75k in wedding costs deducted as a promotional expense for tax purposes.  The tax judge didn't buy it.

Moka was also backed by the Ferst brothers, founders of TradeFreedom (the discount broker sold to Scotiabank).  Tactico, the investment operation of Rick Ness and Liam Cheung was also involved in providing capital and operational help. Rick Ness was the key man behind Penson Canada.  Along with Liam, he also brought Fidelity Clearing to Canada.  Tactico is now an active VC investor.  I will write more about these players eventually.

Mogo is a fintech superapp offering everything from crypto trading to mortgages.  In 2019, Mogo merged with Michael Wekerle's Difference Capital and he still serves as a director.  That's The Wek, aka Mick Jagger meets Warren Buffett, proprietor of El Mocambo Tavern.

The legendary El Mocambo tavern
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