Banking apps Pillar and Billi close as funding dries up for FinTech companies

Two Canadian FinTech startups have ceased operations as funding continues to dwindle for the sector.

Montréal neobank Pillar, backed by Diagram Ventures, and Victoria-based personal finance app Billi have both shut down in the past month, becoming the latest casualties of the downturn in venture capital investment.

Canada’s FinTech sector is seeing more startups struggle as they operate in a downturn.

Pillar CEO Michael Mire wrote on the startup’s website that while Pillar experienced rapid growth, it was not operating profitably due to its size.

“Pillar is a venture-backed company that prioritized growth over profits,” Mire said. “Unable to secure additional financing on reasonable terms, we were no longer able to support our current business model for growth.”

Mire founded Pillar in 2021 together with Elena Litani and Vincent Deschenes. The startup provided checking accounts to Canadian business owners and worked with over 1,500 businesses.

Billi offered a financial management platform that integrated information from users’ various bank and credit accounts to provide insight into their spending. It was spun off from Pretio Interactive, which develops marketing technologies, following its sale to marketing agency Bold Collective in 2021.

Billi CEO Tyrone Sinclair’s statement about the company’s closure echoes Mires. Sinclair noted that Billi was “unable to secure the financing required to continue operations.” BetaKit has contacted Pillar and Billi for comment.

Impacted by tough fundraising conditions, Canada’s FinTech sector is now seeing several startups show signs of struggle as they operate in a downturn.

CB Insights reported in 2022 that the second quarter of that year saw venture capital investment in Canadian FinTech companies plunge 70 percent year-over-year, from $1 billion to $300 million.

RELATED: CB Insights report says the bottom fell out of Canadian FinTech funding in Q2 2022

Nuula is another example of a Canadian startup that has faced tough fundraising conditions over the past year. The company, which provided financial products to small business owners, failed to close its Series A round in October 2022, when it had planned to raise $5 million. With limited cash on hand, Nuula laid off its employees and was later sold to Nav Technologies.

On a larger scale, Canadian startups that saw rapid growth during the pandemic are scaling back to cut costs. Debt lender Clearco, which specializes in revenue-sharing deals with e-commerce startups, reached a unicorn valuation of $1 billion in 2021. It had 500 employees at peak in markets across North America, Western Europe and Australia. Clearco conducted two rounds of layoffs over the past year, terminating approximately 175 employees across both. Clearco also ended its international operations in 2022.

In addition to the difficult collection environment, consumer demands are changing as market conditions tighten. In an effort to adapt, a number of startups are shifting priorities in their product strategies.

One such example is Neo Financial. It launched its flagship consumer credit card during the earlier part of the pandemic, relying on retail partners that floundered at the time. Recently, the Calgary-based startup took a renewed focus on embedded finance, which has been described as the future of many fintech companies.

Featured image courtesy of Billi.