TIMIA Capital Corporation (CVE:TCA) (OTCMKTS:TIMCF) is expanding its fintech platform to make additional capital available for North American Software-as-a-Service companies.
The Vancouver-based investment company announced Wednesday that it has received approval from the TIMIA Capital 1 Limited Partnership (LP1) to expand the partnership to C$20 million, an increase from the C$12 million limit it had originally set aside in March 2019.
Shares of TIMIA rose 4.8% on Wednesday to close at C$0.22 in Toronto.
The partnership, which provides financing for early-stage financial technology companies, has had some early success since its inception, according to TIMIA CEO Mike Walkinshaw.
"Our initial limited partnership has been performing well, including having one early exit from the portfolio leading to increased payouts to our Limited Partners,” Walkinshaw told investors in a statement.
“We have continued to see demand from more and more investors looking for good yield-based investments.”
Under the original terms of LP1 announced in March, existing financing agreements with TIMIA’s portfolio of Software-as-a-Service (SaaS) companies, will be transferred into the LP with related monthly payments being distributed, after deduction of fund expenses, to LP unit holders, including TIMIA, on a monthly basis.
The remaining capital will be invested in SaaS companies through TIMIA’s fintech platform and proprietary investment algorithms.
New investment into LP1
The company also said that it had received approximately C$3.5 million in new investment into LP1 and additional investor commitments of C$300,000, which brings the LP1’s capital position to nearly C$13 million.
TIMIA’s consolidated assets, including recent exits, is now over C$24 million.
Walkinshaw said that the non-dilutive option made the most sense for TIMIA’s shareholders while providing an opportunity for new LP1 investors.
"We wanted to be able provide LP1 investors with a good return while funding our fintech platform for SaaS financing,” Walkinshaw said.
Under its revenue-based financing model, TIMIA provides capital to SaaS companies that have a recurring revenue stream. In exchange, the SaaS companies make monthly payments to TIMIA that are a combination of interest and principal on a customized repayment schedule.
TIMIA said it expects to make further investments in the coming months.
--Updated with closing share price--
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