In my previous story on Som Seif, I mentioned in passing they had an SME lending division called Driven (formerly Thinking Capital). It claims $1B-$1.5B in financing since 2006. So I figured, it can't be that big in the context of Purpose's last financing at a valuation of $535m. But since private equity firm TorQuest is involved, it can't be too small either. I now see that The Globe's Clare O'Hara reported from industry sources that Purpose paid over $200m for the acquisition in 2018. The deal involved cash and equity. Paying $200m could have been a mistake. The founder and CEO of Thinking Capital was gone within 18 months. Of the 6 people named as senior execs of Driven in 2022 at the time of its rebrand, none are with the company today! They even went to the trouble of having illustrations made...but all six are gone!
Today, the leadership of Driven consists of Som Seif seconded by more junior people. Som is an investment / funds guy, he has no experience lending.
Thinking Capital / Driven used to name "channel partners" that brought them business, but it no longer features them on its website.
So there's circumstantial evidence that the acquisition has gone terribly wrong. Like Clearco, Thinking Capital claimed to be reinventing the lending game through technology. Acquiring Thinking Capital was supposed to be the first step in turning ETF-focused Purpose into "one of the largest financial technology services platform in North America." That now seems less likely.
The chronology is as follows:
-In 2014, private equity investor TorQuest buys a stake in Thinking Capital. TorQuest helps the firm grow through introductions that lead to "channel partnerships", including with CIBC. TorQuest's top banana Brent Belzberg is a director of CIBC and the "Mayor of Bay Street" (a made-up title).
-In 2018, amidst the hype of "bank-killing fintechs", Purpose acquires Thinking Capital. The deal is partly financed by OMERS. As a result of this acquisition, both TorQuest and Driven founder Jeff Mitelman became "meaningful equity holders" in Purpose.
-Obligatory visions of disruption were proffered, but CEO Jeff Mitelman was gone within 18 months. One of the possible synergies was that Purpose would create funds that provide capital for Thinking. I haven't seen any such funds.
-When Jeff left, an outside hire named Stéphane Marceau became CEO of Driven. He left in 2023. Driven has thus been operating for more than a year without a permanent CEO.