Online mortgage lender Nesto Inc. is reportedly in discussions to acquire a controlling share of CMLS Financial Inc., according to sources cited by the Globe and Mail.

If completed, the deal would represent a major expansion for Nesto, enabling its entry into the commercial mortgage sector for the first time.

While the proposed deal is still in the negotiation phase, sources familiar with the discussions told the Globe and Mail that both companies are expected to retain their individual names and branding.

Nesto, which launched in 2018, has grown rapidly with substantial backing from Portage Ventures, the venture capital arm of Sagard Holdings, a division of Power Corp.

Earlier this year, Nesto also announced a strategic partnership with M3 Group, further enhancing its presence in the mortgage market. The deal brought together two heavyweights in the digital lender and broker network spaces, opening a new suite of mortgage products to M3’s network of 8,500 brokers.

And in December, Nesto announced an agreement to take over the servicing and administration of Canada Life’s mortgage portfolio starting in January. Canada Life announced its exit from the residential mortgage market in 2022.

Nesto has secured over $167.5 million in funding across three rounds by 2022, with investments from notable institutions including Diagram Ventures, NAventures and BMO Capital Partners, according to the Globe.

Vancouver-based CMLS, which first specialized in commercial lending when it opened in 1974, later expanded into the residential real estate market in 2012.

Earlier this year, CMLS announced a change in its leadership team with Sam Brown appointed as president and CEO, while Chris Brossard transitioned to executive chair of the board.

Canada Life Chris Brossard cmls CMLS financial M3 mergers mergers and aquisitions mortgage industry news nesto Sam Brown

Last modified: June 3, 2024