Combination Will Create A Leading Online Lending Platform Serving Small Businesses in Canada
TORONTO, Dec. 5, 2018 /PRNewswire/ -- OnDeck® (ONDK), the leader in online lending to small business, announced today that it has entered into a definitive agreement to combine its Canadian lending operations with Evolocity Financial Group (Evolocity), a private, Montréal-based online small business lender. The combined enterprise, to be branded OnDeck Canada, will be majority owned by OnDeck and will offer a wide range of innovative financing options to small businesses across Canada.
Today's announcement was made by Noah Breslow, Chairman and Chief Executive Officer of OnDeck and Neil Wechsler, Chief Executive Officer of Evolocity. The transaction will combine the direct sales, operations, and local underwriting expertise of the Evolocity team with the marketing and business development capabilities of the Toronto-based OnDeck team. The combined enterprise will also benefit from the scale, technology and data analytics of the wider OnDeck group. Neil Wechsler will serve as Chief Executive Officer of OnDeck Canada, and the management team will include Evolocity co-founders David Souaid as Chief Revenue Officer and Harley Greenspoon as Chief Operating Officer.
"The combination of OnDeck's Canadian operations with Evolocity will create a leading online platform for small business financing throughout Canada and represents a significant investment in the Canadian market," said Noah Breslow, Chairman and Chief Executive Officer, OnDeck. "There is an enormous need among underserved Canadian small businesses to access capital quickly and easily online, supported by trusted and knowledgeable customer service experts. Working together with the outstanding Evolocity team, we will provide a broad range of financing options to further enhance the small business lending experience across Canada."
OnDeck pioneered the use of data analytics and digital technology to make real-time lending decisions and deliver capital rapidly to small businesses online. It has originated over CAD$200 million in online small business loans in Canada since entering the market in 2014.
Evolocity has provided over CAD$240 million of financing to Canadian small businesses since 2010. It uses proprietary risk scoring models, data aggregation, and electronic payment technology, along with Canadian credit and financial performance data to underwrite and facilitate small business financing. With over 70 full-time employees, Evolocity has the skilled talent, industry expertise, and localized technology to continue to successfully serve the Canadian market.
"We are excited to join forces with OnDeck, the North American leader in online small business lending, to enhance our best in class digital financing solutions to small businesses across Canada," said Neil Wechsler, CEO of Evolocity Financial Group. "Additionally, this transaction will augment our data science and analytics capabilities to help deliver an unparalleled merchant experience. The new OnDeck Canada is well positioned to be a leader in the Canadian marketplace."
In Canada, small businesses are the lifeblood of the economy. The most recent analysis on small businesses from the Canadian government* reported that there are 1.14 million small businesses representing 97.9 percent of all businesses in Canada. Small businesses employed over 8.2 million individuals in Canada, or 70.5 percent of the total private workforce. More than half of those businesses – 51.3 percent – requested external financing according to the Canadian government, yet less than half received the financing they needed, according to Statistics Canada.
The combination of OnDeck's Canadian operations and Evolocity is designed to fill that small business credit gap. It will allow small businesses in Canada to benefit from a broad offering of innovative financing options and a superior customer experience, delivered by a dedicated Canadian customer team, operating locally out of offices in Montreal and Toronto.
The transaction combines OnDeck's Canadian operations with Evolocity Financial Group to create a new and larger company. Once integrated, these two companies will be branded as OnDeck Canada. OnDeck Canada and Evolocity are contributing their businesses and assets to the combined enterprise and OnDeck will make supplemental cash investments such that OnDeck will own a majority interest in the new combined entity.
The new entity will be governed by a Board of Directors chaired by OnDeck CEO Noah Breslow and comprised of existing OnDeck and Evolocity management. The entity will be consolidated and reported in OnDeck's financial statements with Evolocity's existing shareholder stake reported as a non-controlling interest. The transaction is expected to close in early 2019 and is subject to customary closing conditions.
*Canadian government statistics as of December 2015. Published June 2016. See: https://www.ic.gc.ca/eic/site/061.nsf/eng/h_03018.html#toc-02
OnDeck, the OnDeck logo, OnDeck Canada, OnDeck Score and ODX are trademarks of On Deck Capital, Inc.
OnDeck (ONDK) is the proven leader in transparent and responsible online lending to small business. Founded in 2006, the company pioneered the use of data analytics and digital technology to make real-time lending decisions and deliver capital rapidly to small businesses online. Today, OnDeck offers a wide range of term loans and lines of credit customized for the needs of small business owners. The company also offers bank clients a comprehensive technology and services platform that facilitates online lending to small business customers through ODX, a wholly-owned subsidiary. OnDeck has provided over $10 billion in loans to customers in 700 different industries across the United States, Canada and Australia. The company has an A+ rating with the Better Business Bureau and is rated 5 stars by Trustpilot. For more information, visit www.ondeck.com.
About Evolocity Financial Group
Evolocity Financial Group offers fast and flexible financing solutions to small and medium-sized Canadian businesses. With a simple online application process, Evolocity Financial Group is focused on SME merchants and is a great source of growth capital, quickly. A Canadian company, Evolocity understands the unique cash flow demands affecting small businesses and has developed an innovative approach to SME financing. For more information, please visit www.evolocity.ca.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other legal authority. Forward-looking statements can be identified by words such as "will," "enables," "targets," "expects," "intends," "may," "allows," "plans," "continues," "believes," "anticipates," "estimates" or similar expressions. These include statements regarding the pending combination of OnDeck's Canadian lending operations with Evolocity Financial Group and the expectation the combined businesses will be a leading online small business lending platform in Canada. They are based only on our current beliefs, expectations and assumptions regarding the future of our business, anticipated events and trends, the economy and other future conditions. As such, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and in many cases outside our control. Therefore, you should not rely on any of these forward-looking statements. Our expected results may not be achieved, and actual results may differ materially from our expectations. Important factors that could cause actual results to differ from our forward-looking statements include risks relating to: (1) the failure of the pending transaction to close or unexpected delays in the closing due to the failure to satisfy one or more of the required closing conditions, or delays in satisfying those conditions, or for other reasons; (2) our ability to integrate the Evolocity and OnDeck Canadian lending businesses, including unexpected costs and difficulties related to the integration; (3) the anticipated benefits of the transaction not being realized in full or at all, or taking longer to achieve than expected; (4) potential adverse reactions to the transaction announcement or the closing of the transaction that could negatively impact financial performance; (5) worsening economic conditions that may result in decreased demand for our loans or services and increase our customers' default rates; (6) the effectiveness of our risk management efforts; (7) disruptions in credit markets and the availability and cost of our key funding sources; (8) our growth strategies, including our planned expansion in Canada through the pending transaction and our ability to effectively manage that growth; (9) changes in U.S. or Canadian federal, state or provincial laws or regulations, or judicial decisions, if and when issued or enacted, involving licensing or supervision of commercial lenders, interest rate limitations, the enforceability of choice of law provisions in loan agreements, the validity of bank sponsor partnerships, the use of brokers or other significant changes; (10) our ability to prevent or discover security breaches, disruption in service and comparable events that could compromise confidential information held in our data systems or adversely impact our ability to service our loans; (11) our ability to hire and retain qualified employees necessary to fulfill the operational, technological and strategic goals of the newly combined company; (12) the impact of competition in our industry and innovation by our competitors; and other risks, including those described in our Annual Report on Form 10-K for the year ended December 31, 2017 and in other documents that we file with the Securities and Exchange Commission from time to time which are or will be available on the Commission's website at www.sec.gov. Except as required by law, we undertake no duty to update the information in this press release.
P: (203) 526-7457
OnDeck Investor Relations
P: (646) 668-3582
View original content to download multimedia:http://www.prnewswire.com/news-releases/ondeck-announces-agreement-to-combine-canadian-operations-with-evolocity-financial-group-300760552.html