Fispan doesn't need the cash. So why has Lisa Shields's B.C. fintech just raised $30-million?

Globe and Mail

03-06-2025

One of Canada's most successful women tech entrepreneurs, Lisa Shields, has raised US$30-million for her latest company Fispan Services Inc. in a deal led by U.S. growth equity firm Canapi Ventures.
Beyond the headline information, however, the details of the deal reveal how much the financing market has shifted since the tech bubble burst in 2021.
The Fispan transaction 'is quite different' from deals of that era, which saw money-losing startups pursue growth at all costs and raise huge financings at ever-inflated valuations, said Tom Davis, Canapi's San Francisco-based general partner.
Instead, it is more indicative of a return to saner market dynamics, he said. 'This is a classic growth equity deal.'
For one, Fispan didn't need the money. Fispan sells subscription software tools that enable banks to embed services for mid-market companies into enterprise resource planning (ERP) and accounting platforms such as Oracle NetSuite, Intuit QuickBooks and Xero. That makes it easier for clients to handle cash and accounts management in one place.
Fispan has 15 customers, including Bank of Montreal, Toronto-Dominion Bank, JP Morgan and Wells Fargo, and is used by 4,500 of their clients.
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The nine-year-old Vancouver company generates US$25-million-plus in annual revenue after growing by 80 per cent on average over the past three years. It turned profitable last year and still has half the US$16-million from its last funding in 2021. (Fispan did fall prey to the grow-at-all-costs mindset, Ms. Shields admits, before cutting 30 per cent of staff in 2022 and shifting 'to serve our bank clients with quality and consistency at all costs.')
Since Fispan sells to banks, it doesn't spend much on marketing and 'has fantastic unit economics, a proven sales motion, a solid customer base and high net dollar retention within existing customers,' said Mr. Davis. Meanwhile, valuations for fintech companies are running at eight to 12 times revenues, about half what they were at the peak.
So why raise at all?
'You're asking the question we had as an internal debate,' said Ms. Shields, an aeronautical engineer by training whose previous company, payments platform provider Hyperwallet Systems Inc., sold to PayPal Holdings Inc. for US$400-million in 2018.
The answer is two-fold, she said: to 'remove liquidity pressure' by offering investors a chance to take money off the table. Most of the Canapi-led investment – US$17-million-plus – is going to angel and seed-stage backers in what is called a secondary deal.
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Secondaries have become commonplace as mergers and acquisitions, and initial public offerings, have dried up. While companies aren't keen to issue equity or sell at lower valuations, many investors are happy to cash in some gains. In fact, Ms. Shields would have been content to do just a secondary offering and was only willing to sell up to US$15-million in primary equity to minimize dilution.
'We didn't want to take more than we had to,' said Jay Rhind, a Fispan director and partner with Rhino Ventures.
The second reason was to find a new investor with expertise and deep pockets. Fispan had had the same group of investors since 2018 – early Fispan investor Rhino led the 2021 round – and Ms. Shields wanted to add a growth equity firm to her ownership group and boardroom that was familiar with the realities of selling to slow-moving banks. To make the deal big enough to interest growth equity firms, which typically invest large amounts in deals, Ms. Shields targeted a US$40-million raise, but existing investors ultimately weren't willing to sell as much as expected.
Canapi was the ideal choice for several reasons: Because it invests in a wider range of deals, it was open to investing a lower amount than some growth equity firms. Its leaders hail from finance, financial technology and regulatory affairs (managing partner Gene Ludwig was chief banking regulator of the U.S. during the Clinton administration), and its funders are comprised of 75 financial institutions, many of which could open doors for Fispan.
That was important for Ms. Shields, who started Fispan after noticing banks weren't keeping up with digital challengers that were plugging their services into business software platforms. She set out to build tools that would make banking services 'just as delightful and easy to use as those of any fintech' on those platforms.
But many fintechs that target mid-market corporations (those with US$30-million to US$2-billion in annual revenues) typically top out before hitting 10,000 customers, she said. Ms. Shields sees a potential market of 250,000 such companies in North America alone and is eying expansion in Britain.
'Nobody has ever had the kind of market share that really makes it interesting. We think with our bank-based distribution model we have a really interesting opportunity to get there,' she said.
'I want guidance from people that have worked with banks. This is about structuring the company to be able to continue high growth with discipline in the face of this radical technological shift that's coming, and we want to be part of it.'