Winnipeg-based Telpay acquires Toronto startup Notch Financial

Winnipeg payments company Telpay Inc. has acquired Notch Financial, a Toronto-based business that creates accounts receivable automation software.

The acquisition strengthens Telpay’s ability to help Canadian businesses manage the complete flow of money by adding modern invoicing, payment collection and ordering capabilities to its platform, according to a news release.

Terms of the deal were not disclosed.

Mark Loewen, Telpay’s president, described it as “the first strategic, large-scale acquisition” in the company’s 41-year history.

Until now, Telpay has helped businesses gain greater control over the money flowing out of their organizations through supplier payments, payroll and approval workflows.

The addition of Notch’s technology means Telpay can expand its capabilities on the other side of the cash flow equation and help businesses invoice customers, collect payments faster and gain better visibility into incoming cash.

“To say that we’re excited about (the acquisition) is an understatement,” Loewen said.

“The value that we’re creating here is about making sure that Canadian businesses can stay in control of their financial operations while doing the things that they got into business to do. It’s not often that bakers get into business to run the financial operations of the bakery, right? They want to make the bread and we want to enable that.”

He cited a U.S. Bank study showing 82 per cent of businesses fail because of poor cash flow management. “(Acquiring Notch) accelerates our ability to build a more complete cash-flow platform that better serves Canadian organizations.”

Telpay employs around 80 people and processes more than $28 billion in transactions for 13,000 businesses annually.

Notch, meanwhile, was started four years ago by serial entrepreneur Jordan Huck. The company’s product simplifies invoicing, payment collection and ordering for customers.

Notch employed eight people at the time of the acquisition. A few of those employees, including Huck, are joining Telpay’s staff, Huck said.

Huck wanted to sell Notch for the same reasons Telpay wanted to buy it: it will lead to a better product for customers.

“We always knew that to really solve the cash flow needs for our customers, we needed to get into the pay automation space,” he said. “We saw the opportunity to join the Telpay ecosystem as an opportunity to really advance that mission for our customers.”

Both Huck and Loewen said they share a common passion for Canadian entrepreneurs and businesses.

“Mark and I connected really deeply and passionately about building things in Canada,” Huck said. “I love the culture they’ve built at Telpay.”

While Loewen declined to get into specific numbers, he said Telpay is investing a significant amount of capital into integrating the two platforms.

“Customers can depend on the fact that not much is going to change in the short term, but there’s a lot of heavy investment taking place,” he said. “(We’re) making sure that the innovation and outcome continues to add value for both groups of customers.”

Bill Loewen, Mark Loewen’s great-uncle, started Telpay in 1985 as the research and development division of Comcheq Services, the payroll company he founded in 1968.

Today, Telpay is the largest independent electronic payment company in Canada.

aaron.epp@freepress.mb.ca