Portage targets $1B for structured late-stage fintech fund

Global fintech investor Portage is raising up to $1 billion for a new fund to make structured investments in late-stage fintech startups.

Why it matters: With valuation compression hitting fintech companies, more will seek structured financing arrangements — and this fund aims to capitalize on that opportunity.

Driving the news: The Portage Capital Solutions (PCS) fund aims to raise between $750 million and $1 billion, Portage founder and CEO Adam Felesky tells Axios.

• The fund will be anchored with $200 million from Portage and is being co-led by Daniel Ballen, most recently a structured and private equity portfolio manager at PIMCO, and Devon Kirk, formerly managing director & head of capital solutions at CPP Investments.

Catch up quick: Portage primarily invests in the banking, insurance, and wealth management categories, with portfolio companies that include Alpaca, Clearbanc, and Wealthsimple.

Of note: Beyond capital, Felesky says the firm offers a platform providing portfolio companies with tech, sales, and business development support.

• And it has an LP base of 25 corporates and financial institutions looking for acquisitions or business partnerships.

Between the lines: The new fund targets late-stage fintechs who might have raised at outsized valuations in 2020 or 2021 and are seeking additional capital — but want to do so without raising a down round.

• According to Felesky, the fund can provide companies "a structured preferred or convertible [financing] to some future price, where we get some downside protection, and they don't have to have a headline valuation that's lower than their last round."
• The firm expects the average round size out of this fund to be about $150 million, which PCS would lead by investing around $100 million.