Kevin Sandhu's fintech startup, Grow Financial, works behind the scenes to raise the banking industry's digital game
anks and credit unions look to 33-year-old Kevin Sandhu to help them keep pace with changing consumer demands. “We're really the tech in fintech—that's the problem, at the end of the day, I think we're solving,” says the boyish founder and CEO of Grow Financial Inc. at his company's bright, sparsely furnished offices in Vancouver.
Grow, which specializes in white-label digital banking services, belongs to a cluster of local financial technology companies that Sandhu puts at more than 20. Last year it was the only B.C. name to make the Fintech 100, an annual global ranking compiled by Australian investment firm H2 Ventures and KPMG LLP.
A lifelong entrepreneur who started his first business at age 12, Vancouver native Sandhu knows the financial industry well. Before founding Grow as Grouplend in 2014, he spent several years on Bay Street, working in
private equity for Connor, Clark & Lunn Financial Group and in mergers and acquisitions advisory at Royal Bank of Canada.
Sandhu says Grow was different because it didn't force people to choose between a fintech startup and a banking brand they trusted. “We looked at it and said, `That's the piece that's fundamentally broken,'” he recalls. “We think that consumers want a better experience—a more affordable, personalized, digital experience—but they don't necessarily want to be forced out of their incumbent relationships with old, established brands.”
Grow, which has almost 30 staff, now works with most of the Big Five banks; its clients also include many credit unions. The firm's offerings range from consumer lending and fraud prevention to analysis of customer data, which banks can use to improve their products and services. Grow's licensing fees are typically lower than those charged by big enterprise software providers, Sandhu says. The company uses a model that he compares to revenue sharing: the bulk of fees only kick in when clients start making money.
So far, Grow—whose top investor is Markus Frind, founder of dating website Plenty of Fish—has raised about $10 million in funding. It has a road map to move beyond retail banking, into areas such as insurance, retirement planning and wealth management. The firm, which has a Toronto office, also plans to expand outside Canada next year. Although the U.S. may not be a prime target thanks to its web of federal and state regulators, Sandhu admits, Grow is eyeing the U.K. and Australia. At home, his company faces scrutiny from clients for being a mostly cloud-based service provider. As part of its effort to ease security concerns, Grow hires third parties to try to hack its systems, Sandhu says. “Building confidence from a security perspective is probably our biggest hurdle to date.”