Well here’s a very novel approach. Invite your competition and “enemies” into YOUR “web” and encourage them to attack you. Hmmmm! The Desmarais family up in Canada, which runs mutual funds, insurance, etc via Power Corp. of Canada, is earmarking almost $200M to spend on fintech startups. They invite some of those same companies to “come in” and compete with Power Corp’s established business’s to innovate, compete and have a base to grow. Sounds like a new name for an incubator, but hey its Canada.
“Canada’s billionaire Desmarais family has come up with a novel approach to fend off the technology startups that threaten its financial services empire: Bring the enemies in and invite them to attack.
Power Corp. of Canada, the Montreal-based holding company that runs one of the country’s biggest insurers and mutual-fund companies, has set aside C$250 million ($186 million) to spend on fintech startups in various stages of development. The plan is to have them compete with Power’s older businesses, permeate the corporate culture and accelerate the transformation of the firm from within.
“We want you to attack our group, because we want you to do the job that other people are going to do to us,” said Paul Desmarais Jr., the chairman and co-chief executive officer of Power Corp. “We want to do it from the inside, and we want to give you a big budget.”
In a rare press briefing following Power’s annual meeting in Toronto last month, Desmarais Jr. described the mission the company gave Portag3, the in-house venture fund set up in October that’s spearheading the effort.
“Fintech is changing the financial services world,” he said. “It’s big, it’s coming, it’s there and we want to be part of that.”
Desmarais Jr. says Power’s strategy stands out in the industry as a hybrid model between companies that try to change on their own but face resistance internally, and others that subcontract work to startups. Its Power Financial Corp. unit has invested C$100 million in robo-adviser Wealthsimple Financial Inc., a direct competitor to some of Power’s wealth-management companies that targets millennials. Power owns a majority stake in the startup, according to its website.
“I don’t think many institutions would have had the foresight to let that company continue to operate on its own despite the capital investment that we’ve made,” Adam Felesky, Portag3’s president, said in a phone interview, referring to Wealthsimple…”