April 26, 2023: The Power of Leveraging Canadian Universities

What is Parachute?

Parachute is a fincare (financial care) company that aims to help Canadians struggling with predatory lending. A loan with purpose, Parachute educates and empowers customers to help them break debt cycles, save money and improve their financial well-being.

What is the insight/reason that led you to launch this business?

Canadian households are easily the most indebted in the G7. More than eight million Canadians have credit scores below 720, which means they only qualify for predatory loans with rates as high as 36-47%. The negative impact of these loans is beyond debilitating. With high interest rates, hidden fees and penalties, predatory lenders stack the odds - making it nearly impossible for the borrower to get debt free.

How did you get started?

Having counselled clients within the financial sector for more than 30 years, Bruce Hodges saw that the social stigma surrounding debt made it difficult for people to discuss their issues openly – even with finance professionals. And with many having low credit scores, that meant choosing a predatory lender with high interest rates and hidden fees – making it nearly impossible to achieve any kind of financial stability.

Seeing a gap within the lending community, Bruce founded Parachute - a lender designed to provide clarity through the confusion.

Parachute has been part of the Founder in Residence program with Highline Beta since August 2021.

How did you get your first customer?

Our original acquisition methods focused primarily on Facebook and Google ads. We tested multiple variations of images and messaging while acquiring customers. Ultimately, this strategy didn’t attract the volume of customers we needed to onboard, so we pivoted to acquisition partnerships with the likes of Borrowell, SmarterLoans, ClearScore, and Credit Karma, to name a few.

What is the long-term vision?

To be an unwavering ally to the financially vulnerable by empowering them to build financially healthy futures.

Interesting metrics:

65+ customers, working towards 300 by the end of 2023

$1M+ in loans, working towards $5M by end of 2023

Who are your customers and how do you help them?

Our target market is the eight-plus million Canadians with credit scores below 720 that have debt with - and/or are targeted by - predatory lenders. The Parachute program starts with a debt consolidation loan to help clients reset their financial situation to a more achievable payback plan. We set simple but critical monthly goals, which can help customers work towards financial well-being and achieve up to 10% of their loan in cash-back, accrued monthly and available at the end of the term.

Throughout the customer journey, we offer additional incentives and rewards based on participation to help build financial literacy, confidence and healthier financial behaviours.

What is your biggest victory? What setback(s) did you overcome?

Victories: We have achieved over $1M in funded loans to date, demonstrating solid progress on product market fit.

Setbacks: We found organic acquisitions more challenging than anticipated, and pivoted to B2B2C strategies and partnerships.

What piece of advice would you like to pass on to other Founders?

Setbacks are part and parcel for start-ups. Outside factors are constantly working against you but keeping your purpose front and centre helps drive momentum, and gives the team the needed energy to succeed.

What are the highlights of working at your company?

We have a team with deep knowledge and unparalleled passion around our purpose.

The impact we are making on our customers' lives is incredible!

Learn more about Parachute and the Intuit Prosperity Accelerator: Toronto here.

What is the news?

As reported by the Globe & Mail, Aspect Biosystems struck a development deal with Novo Nordisk that could be worth $2.6b+ USD

What is Aspect Biosystems?

Aspect is a Vancouver-based, biotech company that was spun out of the University of British Columbia. They 3-D print live tissue that can be implemented in humans to cure diabetes and liver ailments.

What is the UBC connection?

The company was founded in November 2013 through a collaboration between two world-class research groups in Engineering and Medicine at the University of British Columbia. Three of the four co-founders were at UBC, two were obtaining PhDs and one was a professor.

UBC's entrepreneurship program encouraged them to build the company which they did.

How can this deal generate so much money?

Novo is paying Aspect $75m USD to fund research and development and invest in the company. This provides Novo with the license to develop up to four products to treat diabetes or obesity.

Each of those four products can pay up to $650m in payments to Aspect. In addition, Aspect could earn future royalties on those products.

Amongst many of the reasons listed, why else is this so impressive?

Canadian universities are known for great research but their reputation for translating that research to world-beating companies is not as stellar as you'd think.

Aspect would not exist without the cross-disciplinary research, the encouragement of the entrepreneurship program to turn the research into a business, and what we assume is a clear tech transfer agreement this company would not get off the ground.

What are the takeaways for our community?

Across Canada, there are world-class universities doing cutting-edge research.

If we can work with the universities to identify the commercial applications, get businesses started, and do so in an economically sensible way we could great generational companies. Each example of success should spur universities to think differently.

Deep tech companies need a long time to succeed.

First, they have to prove the tech can work which can take five to ten years then they have to commercialize it. Judging these companies takes a longer time scale than software startups.

We don't talk a lot about the deep tech companies but Canada is a leader in the space.

TechTO Quick Takes covers the latest news trends and analysis from across the Canadian Tech Ecosystem. 

In our most recent episode of Quick Takes, Alex and Alex discuss:

• The current market

• The new Canadian consolidators

• The benefits of changing trends

• How to spin technology out of Canadian Universities

• Recent raises, acquisitions and announcements making news from across the ecosystem

Listen now on Apple, Spotify or wherever you listen to your podcasts

New episode drops on May 4. Listen live across the TechTO socials at 1pm ET / 10am PT

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-Kate Railton, SVP People, Mejuri

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Check out the interesting content, events, and happenings for the community here:

• Prompt Engineering Hackathon, brought to you by Voiceflow. You could also win up to 10k USD in cash prizes!

• TechTO Together: TORONTO May 1, 2023: Learn from the greatest Founders, Investors, and Innovators including Janet Bannister, Alex Gould with more announcements coming soon! 

• TechTO: Retail May 24, 2023: Learn from Lauren Steinberg, Amber Foucault, Drew Cashmore, Marie Chevrier, Kelly Brawn about all things technology, brands, and retail

Want to showcase your company, events, and opportunities to 60,000 subscribers across the Canadian Tech Eco-system? Reach out to [email protected] to learn more!