A digital challenger to Canadian banks has announced a merger than will help it accelerate its growth.

Vancouver-based Mogo Finance Technology will combine with Difference Capital Financial with the combined entity expected to be named Mogo Inc.

It will focus on its aim to become the leading fintech platform in Canada, offering a range of banking and financial products including a digital mortgage experience.

"This transaction enables Mogo to continue to invest in new products and innovation, building on our leadership position in the Canadian fintech space," said David Feller, Mogo's Founder and CEO. "We are excited by the opportunity that the Transaction presents for shareholders of Mogo and Difference and are very pleased to have the support of the Difference board. We look forward to working closely with the leadership team at Difference to complete the Transaction."

Additional resources
The combination will give Mogo immediate access to approximately $9 – $10 million in cash, which reflects proceeds from Difference's two recently announced monetizations.

"The merger with Difference strengthens our financial position and represents a significant opportunity to create value for shareholders of the combined entity," added Greg Feller, Mogo's President. "Difference has invested in many of Canada's leading technology companies and Mogo has built a valuable distribution platform. Shareholders of both companies will benefit from improved financial flexibility as we execute on our strategy of partnering to bring best-in-class products to our more than 800,000 members."

The Transaction is subject to Mogo shareholder approval, regulatory approval, and satisfaction of other customary conditions. The Transaction is expected to close in the second quarter of 2019.