Nesto Group was created just seven years ago but the tech-forward firm has already become a key player in the Canadian mortgage industry and just launched commercial mortgage origination activities in Quebec.

Chief executive officer Malik Yacoubi and chief technical officer Karim Benabdallah are technology entrepreneurs who worked together at Ecomsys, Mobilito and PaymentPin over the past 25 years before co-founding Nesto Group in 2018. 

“We started as a digital mortgage broker by placing loans to third-party lenders,” Yacoubi told RENX. “In 2020 we made the decision to verticalize ourselves in order to control the full experience.”

Montreal-based Nesto Group invested in:

• a technology platform that enabled customers to apply for a mortgage online;
• an underwriting platform that gave it the ability to approve loans and validate credit;
• and a servicing platform that enabled it to collect payments from customer bank accounts.

“By 2022 we had built a true end-to-end mortgage platform -- including origination, advice, underwriting and servicing -- all built on the cloud with one set of data, and we thought that was quite unique,” Yacoubi recalled.

That year Nesto Group also started signing deals to license its services to companies including IG Wealth Management, Equitable Bank and Canada Life on a white-label basis — through what it calls its Nesto Cloud Solution — so their customers weren’t aware of who was powering their experience.

CMLS acquisition

With the support of investors including Diagram, Portage, NAventures, IGM Financial Inc., BMO Capital Partners, Fonds de solidarité FTQ and Fondaction, Nesto Group acquired CMLS for an undisclosed price in June 2024. One of Canada's largest independently owned mortgage services companies, CMLS was founded in 1974.

The CMLS acquisition gave Nesto Group's platform greater scale, new data to leverage, and access to broker channels, commercial multifamily properties and experienced people -- some of whom now have leadership roles with the company.

“They were originating their residential mortgages through the broker channel and Nesto was 99 per cent direct to consumer,” Yacoubi said. “They are a leader in the commercial multifamily space, so that was a new addition for us.

“They had another division that was also doing white-label solutions for other financial institutions in the mortgage space called Intellifi, so it was a great match.”

Intellifi offers residential and commercial lending software and services to provide scalable, digital end-to-end solutions that reduce execution risks and power growth for mortgage lenders.

New Quebec addition for CMLS and Nesto Group

Yacoubi said Nesto Group had 330 employees and managed approximately $11 billion of mortgages, either directly or through its white-label solution, in May 2024. Those respective numbers grew to more than 1,000 and over $70 billion following the CMLS acquisition.

Nesto now has offices in a dozen cities across Canada.

The group’s latest addition, through CMLS, is a team of 10 people led by Charles-André Roy and Charles-Benoît Parent. Both men were formerly with CBRE and each have more than a decade of experience in investment banking and capital markets. 

They’re opening an office in Quebec City and strengthening the company’s presence in Montreal to better serve commercial real estate borrowers across the province.

“Having a strong commercial presence in the Quebec market was really important for us because we had close to none,” Yacoubi said.

Future growth for Nesto Group

Yacoubi said some cities are more challenging than others for residential mortgages, with Toronto being one of those due to the collapse of the condominium market. 

Overall, however, Yacoubi said the lending business has been resilient and customers have largely been able to cope with interest rates that are higher than in the early part of this decade.

Nesto Group has been particularly successful in capturing the business of first-time homebuyers, Yacoubi added.

Nesto Group’s lending operations have been doubling in size every year since inception, according to Yacoubi, and he expects its rapid growth to continue.
 
While the focus is on internal growth, Yacoubi said there’s still an appetite for further acquisitions and the company will act on opportunities if it thinks there’s a good fit and the timing is right.

“We're always obsessed about providing the best experience and the best product to our customers,” Yacoubi concluded.