FintechWerx to buy Ruby Loans platform for CAD $825,000

FintechWerx has agreed to acquire the Ruby Loans lending platform from 1431575 B.C. Ltd. in a deal valued at up to CAD $825,000.

The technology is aimed at small and medium-sized business lending. It is designed to let borrowers initiate credit enquiries while automating parts of the loan origination process.

Under the terms of the deal, FintechWerx will pay CAD $100,000 in cash at closing, including a refundable CAD $30,000 deposit already paid, and issue 728,862 common shares at a deemed price of CAD $0.6174 each. It has also agreed to pay up to a further CAD $275,000 in shares if certain milestones and deliverables are met.

The milestone share issuances will be calculated using the 10-day volume-weighted average price of FintechWerx shares on the Canadian Securities Exchange before each milestone is achieved, subject to exchange pricing rules.

Ruby Loans is designed to move a loan application through a staged process, from an initial enquiry to the submission and assessment of key documents, alongside financial and risk evaluation. The platform is intended to produce a loan enquiry before credit risk staff become involved.

The acquisition would add lending software to FintechWerx's existing business, which includes onboarding, payments, identity verification, fraud mitigation and data services for merchants, independent sales organisations and payment service providers.

Management plans

As part of the agreement, FintechWerx will begin discussions with Ruby Loans Founder Fred Zdan about appointing him Executive Chairman and Chief Executive Officer of FinanceWerx Solutions, a wholly owned subsidiary.

The transaction remains subject to customary conditions, including corporate and regulatory approvals, as well as approval from the Canadian Securities Exchange.

Shares issued under the agreement will be subject to a four-month-and-one-day hold period from the date of issue.

George Hofsink, Chief Executive Officer of FintechWerx, outlined the company's view of the deal in a statement.

"Ruby Loans adds an important capability to our broader vision of building intelligent financial infrastructure," said George Hofsink, Chief Executive Officer of FintechWerx.

The acquisition expands FintechWerx's lending technology capabilities and adds loan origination software to its portfolio. The company said it plans to combine Ruby Loans' platform with its own data, analytics and artificial intelligence initiatives to improve lending workflows for financial institutions.

"Lending remains one of the most significant opportunities for financial institutions and lenders to improve efficiency, customer experience and decision-making. By bringing Ruby Loans into the FintechWerx ecosystem, we are adding proven loan origination technology that we believe can be further enhanced through our data, analytics and AI initiatives."

Zdan said the transaction would give the lending platform access to a wider market through FintechWerx.

"I developed Ruby Loans to simplify what has traditionally been a complex and time-consuming lending process for both borrowers and lenders," said Fred Zdan, Founder of Ruby Loans. "Joining FintechWerx creates an opportunity to accelerate that vision by combining our lending expertise with a broader financial technology platform."