Portage is a Canada-based global investment platform focused on fintech and financial services. Founded in 2016, Portage has more than $2.5B (USD) in assets under management, and functions under two umbrellas. Portage Ventures supports innovation in fintech and financial services, while Portage Capital Solutions functions as a capital partner for later-stage players.

Portage’s LP base ranges from institutional LPs like pensions, but also includes corporates, which Portage leverages in support of its B2B portfolio companies’ ecosystem-connection and growth strategies.

Stephanie Choo is a partner at Portage Ventures, and has played a keystone role in the group’s fintech-focused funds since its founding. Choo primarily invests in consumer fintech, payments, infrastructure, and wealthtech.

Portage raised its third fund at the tail end of 2021, and has been deploying those funds gradually over the past two years. Crucially, Choo said, Portage’s three-year deployment cycles have let it invest in fintechs at realistic valuations in 2023, rather than having invested entirely in 2021 before market corrections.

“If we had deployed all of our capital in 2021, I think we would be in a very different position… from a cost-based perspective, but also an ability to course correct perspective,” Choo said.

Rather than pause investment entirely in 2021, Portage identified Seed rounds as a more promising locus for investment than other rounds. Companies were coming in and pre-empting Series A evaluations within one or two quarters of a Seed round, which meant investments at Series A were happening with little evidence of returns or fundamentals.

“So we were very strategic in the way that we deployed our capital, trying to find ‘pockets of value,’” Choo elaborated. “Not to say that we didn’t also price in crazy Seed rounds, which we did, but we felt like there was better value than at the [Series] A [level].”

Portage complemented that investment strategy by identifying Series B companies with healthy fundamental metrics. To Portage, that means a company’s unit economics, its gross margin profile, and, to an extent, growth rate—though to a lesser extent now than two years ago.

Choo said Portage is keeping an eye on several emerging trends. Real-time payments (RTP) technologies are scaling rapidly, even as consumer adoption isn’t fully certain. Rates also play a clear role in Portage’s outlook, given its effect on bond and credit products, as well as on housing mobility, affecting the attractiveness of HELOCs as a lending vehicle.

Regulatory changes—OCC’s regulatory activity against banks, the CFPB’s new mandates, the SEC’s movement on a Bitcoin spot ETF, and other developments—are other variables that affect the long-term viability of a range of fintech products. Choo said she expects companies she invests in to be on top of relevant developing regulations, and draft contingencies for the frameworks a regulator can choose.

Speaking to The Financial Revolutionist in October, Choo said Portage had signed four term sheets over the previous six weeks, which is more than the group had done in all of 2023. “I think we’re finally starting to see movement—companies coming back to market, the gap between founders’ and investors’ expectations closing, and companies now growing into their traction and metrics from the last post,” Choo said. “I expect we’re going to be pretty busy through the end of the year and through early next year.”

“Everybody delayed fundraises as long as they could,” Choo continued. “And you can’t wait forever.” With public markets up and inflation relatively static, investors and companies realize that conditions are about as good as they’ll get—for now.