Canadian digital insurance provider Apollo has raised $18.5 million Canadian dollars (about $13.6 million) to launch a wholly owned subsidiary that will allow Canadians to use buy now, pay later (BNPL) for their insurance premiums.
The company’s new subsidiary, FinShore, provides a fully embedded BNPL option to more than 100,000 Canadians who are insured with Apollo, as well as insurance brokers who use the company’s platform to do business on behalf of their clients, the company said in a Monday (May 27) press release.
“Establishing FinShore is an innovative step forward for Apollo, and will do much to make the lives of Canadian renters easier,” Apollo CEO Jeff McCann said in the release. “In this economic climate, particularly with the rise of renting across Canada, consumers are looking for flexibility in their payment options.”
The new BNPL offering joins Apollo’s digital platform that was launched in 2019 to offer Canadian consumers fully digital insurance products and has since expanded to deliver embedded insurance products to partners like property management companies, PropTechs and insurance brokers, according to the release.
In the financing for FinShore, Fair Capital Partners (FairCap) served as lead arranger and agent, Innovation Federal Credit Union (IFCU) acted as lender, and PricewaterhouseCooper Corporate Finance Debt & Capital Advisory (PwC CF) was the exclusive financial advisor to Apollo and FinShore, per the release.
“This venture aligns well with our mission to empower the North American lower middle market with fair, intelligent capital solutions,” Daniel Nanson, CEO of FairCap, said in the release.
PYMNTS Intelligence has found that BNPL plans have proven to be especially popular with younger consumers, with 49% of Gen Z shoppers and 52% of millennials saying that they have used the payment method at least once in the past year.
BNPL appeals to these younger shoppers because they typically have less spending power and are developing credit habits, according to “Divided, Not Conquered: Acquirer and Merchant Confusion Clouds Split-Payments Landscape,” a PYMNTS Intelligence and Splitit collaboration.
In another recent development in this space, Agile Premium Finance and ePayPolicy said May 14 that they teamed up to offer insurance industry clients checkout financing options.
In October 2023, Stere Pay unveiled its BNPL gateway for the insurance industry, saying it aims to address the upfront financial burden often faced by policyholders.