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Kanetix Snaps Up

Kanetix-RateSupermarketFor the past few years we’ve written about how rate comparison sites will permanently change the industry. They’re becoming a first stop for tens of thousands of Canadian mortgage shoppers and will someday become a vital distribution channel.

Now, the biggest Canadian mortgage rate site of them all,, has just been bought. The acquirer is Kanetix, a former competitor to and Canada’s top online insurance marketplace.

Kanetix CEO Yousry Bissada wouldn’t disclose what the purchase price was, other than to say it was “not a small sum.” He added that was worthy of its price tag as the leader in its field.

RateSpuermarketHe’s likely buying at a much lower valuation than some of these sites will fetch in 3-5 years. “We are still in the infancy (of rate comparison sites),” Bissada says. “In Canada, the rate comparison market is going to get much bigger.”

Already, he’s seeing considerably more interest from brokers who want to participate in and

Kanetix has hired the entire staff. Bissada says they intend to stick around long term to help the site grow.

The move leaves as the only other major competitor remaining. All the other rate comparison sites are a fraction of the size of with a tiny portion of its search engine equity (ranking). Those other sites include (also owned by Kanetix), Ratesheet, Ratebot and Zoocasa, among others.

Compared to, is focused primarily on mortgage content. It’s a force as well, however, with even better search rankings for certain keywords.

Yousry-BissadaHere’s more from Yousry Bissada, Kanetix CEO…

  • On future companies in this space: “As companies like ours grow, we’ll get the market’s attention…The banks will be there, but they’re often last. They’re the ones that don’t want to change the existing world as much, but often when they jump in they jump in quite quickly.”
  • On why Kanetix wanted to buy another rate site: “We have ComparaSave and Kanetix but both are relatively new in mortgages. Rate Supermarket is well established. When you make an acquisition that is directly in line with where you want to go, it collapses your timeline and you get there a lot faster.”
  • On why Kanetix needs a third rate comparison website: “(To answer this) the best example I know of is Future Shop and Best Buy. They’re owned by the same people. Their strategy is: You go into one and get a price and then go into the other. Now you’ve done your shopping, you know you’ve covered a large portion of the market and have the best price possible. They don’t care which store you buy from.”
  • Why Kanetix bought Rate Supermarket in particular: “Rate Supermarket is the most formidable and most established in online mortgage leads. If you’re trying to collapse the timeline you’re going to buy the one that’s furthest ahead. The second part is that you have to do a deal that they will say yes to. On top of that, Rate Supermarket established us in an area we’re very small in: credit cards (a key focus area for Kanetix).”
  • Why Kanetix couldn’t just invest in its own sites: “Clearly, sites like Rate Supermarket are not going to sit on their hands. They’re going to evolve and grow so if you try to compete against them, you’re taking a piece of the pie, which is ever-growing. If you buy them, you get a much bigger piece of the pie…”
  • On how this will affect the Kanetix / Invis / Mortgage Intelligence deal: “This is unrelated to the Invis and Mortgage Intelligence deal. Kanetix will remain exclusive to them. In time we hope there will be more people willing to join as partners.”
  • On measuring success: “If you’re getting 1-2% of unique visitors turning into customers, you’re real good. You’ve got to see thousands of deals (to close a small amount). The difficulty of online is two things. One, you’ve got to drive a lot of traffic. And two, once they’re there they’ve got to trust you to keep going through the process and buy from you. Conversion rates are small when you are good, but tiny if you’re not good.”

alyssa-richard-ratehubFrom Alyssa Richard, CEO

  • On the benefit of owning multiple rate sites: “Rate sites drive so much traffic from SEO. But it’s hard for one property to have more than one listing in a top position. You can think of having different web properties as shelf space. This was a strategy employed by Bankrate in the US, who bought up multiple web properties in different verticals.”
  • On how she sees the market panning out: “In the U.S. there are three publicly traded companies doing lead generation…There can be more than one successful mortgage comparison site in Canada.”

Ron-ButlerFrom Ron Butler, Butler Mortgage (one of RateSupermarket’s biggest customers)

  • On Yousry Bissada: “Yousry Bissada is someone who spends his time thinking about the future of the mortgage industry and putting down bets on where he thinks the trends lead, maximizing the value of the ‘fresh new idea’ and then selling out at the right time. Just look at his history.”
  • On the value of buying RateSupermarket: “This is an example of experienced, successful business people putting down hard cash to purchase new distribution models for mortgages and other financial services…I would hazard a guess that…Yousry quickly discovered that the execution and cost requirements to get to the top of the Google Search term ‘best mortgage rates’ made it attractive to just buy Rate Supermarket.”
  • On how brokers should react: I think it’s important that mortgage brokers smarten up and quit wishing this kind of on-line information would just disappear. Brokers should start thinking about how their present business models will work in a world of shrinking mortgage origination and discounted mortgage rates.”

Dan-EisnerFrom Dan Eisner, CEO True North Mortgage (another major online mortgage player)…

  • On whether rate sites are now in play: “I do think that corporate Canada has seen the value in these websites and will probably try to roll up (acquire) several of them. I wouldn’t be surprised if RateHub was next on the list.” (Eisner spends significant sums on online lead generation and has a close relationship with RateHub.)
  • On rate site customers: “To process online leads you have to have a whole organization. And you have to be good at it because these leads are not as profitable (as offline business).”

Full disclosure: CMT is testing its own rate comparison portal, with plans for a summer launch.

Rob McLister, CMT