A financing last week minted Canada’s first fintech unicorn. Nuvei, a Montreal based payments processor, raised US $270 million at a US $2 B valuation. Nuvei was started by Philip Fayer in 2003, when he was 24 years old. Philip started the company while taking some time off from attending Concordia University. Only three years later, in 2006, Goldman Sachs, no less, was the first external investor investing $60 million for a 30% stake. Tragically, he never returned to Concordia.
Payments processors enable commerces, both online and offline, to accept credit and debit card transactions. Until 2018, the business was known as Pivotal Payments, in case that rings a bell. Philip started Nuvei because he himself had another business and having no money or credit, could not secure payment processing services.
The Goldman financing allowed the company to be acquisitive, completing seven acquisitions by 2010. By then, the company had grown to about 300 employees in North America and annual revenues of $150 million. The company became Canada’s largest private and non-bank payment processor. Nuvei has continued to grow through acquisitions, most notably earlier this year, acquiring UK-based SafeCharge for US $889 million
In 2017, control of Nuvei was sold to a private equity group, headed by Novacap. They are a major and long-standing private equity player, backed by the Caisse among others. That deal was done at a valuation of US $424 million. And so the latest valuation is a near 5x in less than 3 years. (Though the ROI math is more complex.)
Disappointingly, Philip has said: “there was no master plan”. He actually had another business prior to Nuvei, called Paysystems Corp., which initially grew very fast, but then was the victim of a rule change and had to close.
These days, Nuvei processes around $34 billion worth of transactions a year and has 800 employees in 14 offices. Philip Fayer is 41ish years old and per my calculations, loaded. There was also a more veteran co-founder and CFO figure named Lester Fernandes, a former BMO Capital Markets banker who also made a pretty penny and now runs his own family office. Other key players include David Nault, who was an early senior biz dev guy, and then went on to start fintech VC Luge Capital. Also interesting, how Goldman swooped in well before the locals, though they got out in 2017.
Philip has an interesting life story as well, being born in Montreal, growing up in Belgium and Israel, losing his father at age 16 and attending military school in the US. He is a pilot and a racecar driver. A capable writer could probably do something with all that.
In November, Quebec City-based search tech firm Coveo also achieved unicorn status. Coveo and Nuvei are the only two Canadian companies that currently qualify for the unicorn title, ie a private tech-y, startup-y firm valued at over a billion dollars. I’d like to conclude by saying, eat your heart out Toronto.
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