Nesto Expands into Brokers Channel, Forges Partnership with M3 Mortgage Group

Montreal-based online mortgage lender Nesto has entered into a strategic partnership with M3 Mortgage Group, expanding its reach to over 8,500 brokers within M3's extensive network. This collaboration introduces a Business-to-Business-to-Consumer (B2B2C) component to Nesto's existing offerings. The announcement closely follows Nesto's acquisition of Canada Life's mortgages portfolio in December 2023, following the insurance company's exit from the residential mortgage sector.

Nesto, founded in 2018 as a digital direct-to-consumer mortgage lender, has taken significant steps toward B2B partnerships, especially after securing $80 million CAD in Series C funding in December 2022. The launch of Nesto Mortgage Cloud marked the beginning of the startup's engagement with financial institutions, aiming to diversify its customer base and revenue streams. IGM Financial, a leader in Nesto's Series C funding round, became the first customer to benefit from this new product.

This strategic partnership with M3 Mortgage Group marks a pivotal step for Nesto, allowing seamless integration with M3's expansive network of mortgage brokers. Notably, this network includes well-known brands such as Multi-Prêts, Mortgage Alliance, Mortgage Intelligence, Invis Mortgage Solutions, and Verico. The collaboration facilitates direct submission of mortgage applications to Nesto for financing by M3's brokers, showcasing a synergistic approach to meeting the diverse needs of Canadians seeking mortgage solutions.

Nesto's CEO, Malik Yacoubi, emphasizes the strategic alignment of this move with the company's overarching mission. The decision to distribute its mortgage offerings through M3's extensive broker network reflects Nesto's commitment to reaching Canadians through channels that resonate effectively with their preferences and requirements. This strategic synergy is expected to enhance accessibility and streamline the mortgage application process for a broader audience, aligning with Nesto's goal of making its services more readily available through trusted and established channels within the mortgage industry.

Chase Belair, Nesto's co-founder and principal broker, highlighted the growing trend of Canadians seeking mortgage brokers for advice, making it imperative for Nesto to integrate with the broker channel to scale its services effectively. The rollout of Nesto's mortgage platform within M3 Group's broker network will occur gradually, with the first cohort gaining access in Q1 2024.

The partnership aligns with a broader industry trend, as highlighted by a Mortgage Professionals Canada survey in March 2023, revealing that a significant percentage of first-time home buyers and individuals aged 18 to 34 prefer using the services of mortgage brokers. Nesto's commitment to a broker-first approach resonated with M3 Group's chairman and CEO, Luc Bernard, who emphasized the synergy between the two entities.

Nesto's achievements, including its recent placement on Deloitte's Fast 50 list in November 2023 with a remarkable three-year revenue growth rate of 2,186 percent, underscore its rapid ascent and the growing demand for its services within the Canadian mortgage landscape.