The investors behind Diagram, a Montreal-based venture capital (VC) fund that also provides a launchpad for its investments, are keeping a collective sharp eye out for the next big idea in financial services – including new technologies to help financial advisors – following a fresh round of funding and new angel investors joining the fold.

Diagram announced last month that it had raised an additional $5 million from angel investors, including Robert Frances, chairman and CEO of Montreal-based Peak Financial Group, bringing total funding to $30 million. (Diagram announced its initial $25 million in funding in January.)

The VC fund focuses on building Canada-based financial, insurance and health-care technology startups. More recently, Diagram helped to develop and launch two cloud-based startups: Collage, a Toronto-based platform that automates human resources for businesses; and Dialogue, a Montreal-based virtual health and wellness platform.

With this latest round of funding, François Lafortune, Diagram’s CEO and founder, says the VC fund is particularly interested in developing companies in the insurance and financial planning markets. “There are lots of people who need financial planning. Yet, the [business] still uses antiquated tools,” says Lafortune. “That’s an area in which we’re looking at creating companies.”

Advisors need not be too worried about increasing competition in their market, though. That’s because, in addition to developing direct-to-consumer projects, Diagram’s board also is open to business-to-business ideas that can help advisors and their firms in the day-to-day operations of running a practice.

“We’re as excited about providing tools to advisors to modernize [their businesses and] to give a better client experience,” Lafortune says. “That is as important to us [as] trying different models that are direct-to-consumer.”

To help build on those ideas, Diagram calls on the expertise of its angel investors, who not only provide funding, but also provide access to their networks. And they mentor various teams as they build out a project. One of the VC fund’s recent investors is Frances, who has both a personal and a professional interest in seeing what new companies will come out of Diagram.

Frances has made a personal investment in Diagram via Peak’s holding company, Peak Capital Partners Inc., which he and his family own wholly. Beyond the potential for financial returns, however, Frances also enjoys the chance to mentor fellow entrepreneurs: “I have a big passion for entrepreneurs, being an entrepreneur myself. It’s my way to give back to the investment community.”

Furthermore, Diagram will help Frances keep an eye on new developments in the financial services market that could prove useful to Peak Financial’s advisor force. “I’m hoping, as I get exposed to the pipeline of companies that Diagram refers to us, that there are some companies that our own advisors will have an interest in,” says Frances.

For example, some of the new startups may prove to be interesting to Peak’s advisors as investment opportunities or may offer solutions that will improve an advisor’s business.

Before reaching that stage, however, the ideas and businesses to focus on must be decided. To do that, Diagram’s team puts together a “big pipeline of ideas,” says Lafortune. These ideas come from several sources, such as analyses of global fintech investments to determine which of those ideas are working; pitches from would-be CEOs; and ideas from Diagram’s network of investors, including Montreal-based Portag3 Ventures LLP, another VC fund.

Diagram’s process narrows the pipeline, which usually contains about 25 ideas to begin with, to the 10 best, based on a scorecard that helps the team to assess and prioritize projects. From those 10 ideas, Diagram may be actively working on four, with only one or two making it to launch. This process, from idea to launch, usually takes 18 to 36 months.

To help with the process of developing a company from idea to launch, Diagram recently expanded its executive team: Dan Robichaud, an original Diagram investor, now is a managing partner; Marc-Antoine Ross is chief innovation officer. Robichaud and Ross were co-founders of PasswordBox Inc., a password-management company purchased by Santa Clara, Calif.-based Intel Corp. in 2014.

As well, Diagram has brought on new angel investors in addition to Frances, including: Paul Sabourin, chairman and chief investment officer of Toronto-based Polar Asset Management Partners Inc.; Dax Dasilva, founder and CEO of Montreal-based Lightspeed POS Inc.; Joe Natale, president and CEO of Toronto-based Rogers Communications Inc.; Angela Strange, partner with Andreessen Horowitz, a Menlo Park, Calif.-based VC fund; Pascal Pilon, CEO of LANDR Audio Inc. of Montreal; and Mike Cegelski, managing partner with Montreal-based Panache Ventures Private Ltd.

Having so many individuals from the private sector invest in Diagram is a positive development for Canada’s fintech industry, says Gregory Smith, partner and national leader of Ernst & Young LLP’s wealth- and asset-management practice in Toronto. That’s because this depth of interest demonstrates the depth and multi-generational experience in the fintech space and emphasizes that it’s “not just a couple of kids in the garage.”

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