Difference Capital scores another exit with Ethoca Solutions

Difference Capital Chief Investment Officer Tom Liston

After having lined their pockets with the proceeds of a Vena Solutions transaction, Toronto’s Difference Capital Financial (Difference Capital Stock Quote, Chart TSX:DCF) today announced what it is calling its most successful investment to date.

Fraud prevention firm Ethoca Solutions, which DCF invested in in 2012, will be acquired by an unnamed S&P 100 financial services firm.

“It is certainly one of Canada’s most successful fintech companies,” said Tom Liston, chief investment officer of Difference Capital. “Today’s announcement, coupled with DCF’s recent announcement on Vena Solutions Inc., serves to validate our investment strategy. As with Vena, we are proud to be one of Ethoca’s early backers.”

Difference Capital’s management says it expects the transaction to impact its Net Asset Value by approximately $6.5-million, or $1.12 per share, from its last reported period ended Sept. 30, 2018. The final mark in Q1, which ends on March 31, 2019, will be adjusted for foreign exchange.

In January, Difference Capital monetized a portion of its common share holdings in financial planning and analysis SaaS company Vena Solutions, bringing its cash position to to approximately $13.4-million, up from just $200K on September 30th of last year. Vena on January 9th announced a financing of $115-million from JMI Equity. On paper, Vena’s new valuation meant a return of about 4x for Difference.

Difference Capital currently has investments in Hootsuite, Vision Critical, Mogo Financial, Blue Ant Media and Cardiac Dimensions.