BDC backs dual‑use fintech innovators Photonic, Lastwall

BDC backs dual‑use fintech innovators Photonic, Lastwall in new defence‑focused fund – The Business Development Bank of Canada (BDC) announced Monday a pair of strategic investments targeting Canadian firms that blend commercial fintech capabilities with national‑defence applications. The moves, made through BDC’s newly created StrongNorth Fund and a partnership with the UBC Sauder Scale‑Up Program, aim to accelerate quantum‑ready computing and identity‑security technologies that can serve both financial institutions and defence agencies.

What BDC is funding

Photonic Inc., based in Vancouver, is developing scalable quantum computers and networking hardware that promise to cut processing times for complex calculations by orders of magnitude. Lastwall, a Fredericton‑based startup, offers a credential‑management platform that secures digital identities against phishing, credential‑theft, and emerging quantum attacks. Both companies already have commercial pilots in the financial sector—Photonic’s quantum‑accelerated risk‑analytics engine and Lastwall’s multi‑factor authentication suite for banks—making them prime candidates for dual‑use deployment.

Why the announcement matters

Canada’s defence posture is increasingly data‑centric, and the financial services industry is the largest repository of high‑value data in the country. According to Gartner, 30 % of financial institutions will have adopted quantum‑resistant encryption by 2025, up from less than 5 % in 2022. By injecting capital into firms that already bridge fintech and defence, BDC is addressing a supply‑chain gap that traditional defence contractors have struggled to fill. The investments also signal a broader shift: capital is moving from pure‑play fintech accelerators toward funds that evaluate security, compliance, and export‑control readiness as core criteria.

Technology in context

Quantum computing, once confined to research labs, is now entering the fintech mainstream through risk‑modeling, fraud detection, and portfolio optimisation. Photonic’s architecture relies on photonic‑based qubits that operate at room temperature, a practical advantage over superconducting alternatives that demand cryogenic cooling. In the identity‑security arena, Lastwall’s platform integrates zero‑knowledge proof protocols to verify user attributes without exposing raw data—a capability that aligns with the European PSD2 and Canada’s upcoming Open Banking standards.

Industry impact

The infusion of defence‑grade security into fintech products could accelerate adoption of high‑assurance APIs across banks, insurers, and embedded‑finance platforms. Enterprises that embed Lastwall’s identity‑verification service into checkout flows will be able to market “quantum‑secure” transactions, a differentiator that could boost conversion rates in regulated markets. Meanwhile, Photonic’s quantum‑enhanced analytics may allow large lenders to run Monte‑Carlo simulations in minutes rather than days, reshaping credit‑risk underwriting pipelines.

Competitive landscape

Globally, similar dual‑use funds are emerging. The U.S. Department of Defense’s “DIU” program recently backed a New York fintech startup that applies homomorphic encryption to payment processing. In Europe, the European Investment Bank has earmarked €200 million for quantum‑secure financial infrastructure. BDC’s StrongNorth Fund differentiates itself by focusing on Canadian talent and by pairing capital with the UBC Sauder Scale‑Up Program, which provides go‑to‑market mentorship, regulatory navigation, and access to corporate partners such as Microsoft and Salesforce.

Implications for enterprise marketing teams

Marketing leaders in banks and embedded‑finance providers can now craft narratives around “defence‑grade security” without over‑promising. The availability of vetted, quantum‑ready solutions means campaigns can cite concrete certifications—FedRAMP Moderate, ISO 27001, and upcoming NIST quantum‑resistance guidelines—rather than generic “state‑of‑the‑art” claims. This credibility is expected to shorten sales cycles, especially when targeting government‑linked procurement processes that increasingly require dual‑use compliance.

Future outlook

If Photonic and Lastwall achieve commercial scale within the next 18 months, Canada could host a domestic ecosystem capable of supplying both the global fintech market and NATO‑aligned defence contracts. IDC projects worldwide cybersecurity spending to reach US$270 billion in 2026, with a sizable share allocated to identity‑management and quantum‑resilience. BDC’s strategic bet positions Canadian firms to capture a slice of that growth while reinforcing national security.

StrongNorth Fund’s dual‑use mandate

The fund’s investment criteria require a minimum of 30 % of a company’s revenue to be tied to defence or critical‑infrastructure contracts, ensuring that commercial success translates into sovereign capability.

UBC Sauder Scale‑Up partnership

Beyond financing, the partnership offers startups access to a curriculum that covers regulatory compliance, export controls, and partnership development with tech giants such as Google Cloud and Amazon Web Services.

Market Landscape

Canada’s fintech sector attracted C$12 billion in venture capital in 2025, according to PitchBook, yet only 8 % of that funding targeted security‑focused startups. The StrongNorth Fund therefore fills a niche that aligns with the Canadian government’s “Defence Innovation Strategy,” which aims to allocate C$2 billion to dual‑use technology by 2027. Internationally, the market for quantum‑ready financial services is projected by McKinsey to grow at a compound annual growth rate (CAGR) of 24 % through 2030, driven by regulatory pressure and the looming threat of quantum decryption.

Top Insights

BDC’s StrongNorth Fund uniquely blends defence‑grade security with fintech scalability, a combination few North‑American investors pursue.
Photonic’s room‑temperature photonic qubits could lower quantum‑hardware entry barriers for banks seeking faster risk analytics.
Lastwall’s zero‑knowledge identity platform aligns with upcoming Open Banking mandates, offering a ready‑made compliance layer for embedded‑finance players.
The UBC Sauder partnership equips startups with go‑to‑market playbooks that reference cloud providers like Microsoft Azure and Salesforce, accelerating enterprise adoption.
Enterprise marketers can now substantiate “quantum‑secure” claims with concrete certifications, shortening sales cycles in regulated verticals.

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