The digital investment arm of German insurance giant Allianz Group is taking a stake in Toronto-based financial services provider Purpose Financial.

Under the terms of the deal, Allianz X will pay $53.5 million for a 10-per-cent stake in Purpose and gain a seat on the company’s board.

In a release, Purpose Financial Chief Executive Officer Som Seif said the investment from Allianz X will help the company accelerate its growth trajectory and allow Purpose to expand its product development capabilities.

“Our business has grown exponentially since founding in 2013 and we are still in the early stages of our journey to innovate within the financial services industry,” he said. “This partnership will provide us with additional resources and expertise to accelerate our growth and continue to drive innovation across the financial services sector on behalf of consumers.”

The company’s Purpose Investments unit has about $10 billion in assets under management, and the company expanded into providing capital to small businesses with its 2018 acquisition of Thinking Capital.

Allianz X isn’t the first high-profile investor to take a stake in Purpose Financial, as OMERS Platform Investments bought into the company in 2017. In spite of the increasing number of minority partners in the company, Seif said the latest investment is not a precursor to a sale or initial public offering.

“I see Allianz as no different [from OMERS]. They’re taking a long-term perspective on what we’re doing, and in fact I think if anything it just gives us more validation to the fact that we are building something for the long run,” he said in an interview Wednesday. “So, no, this isn’t a path to a sale, or an IPO, or anything like that.”

Purpose Financial was founded in 2013 by Seif, a Bay Street veteran who built Claymore Investments into a Canadian exchange-traded-fund powerhouse before selling the firm to a division of BlackRock Inc. in 2012. Prior to Claymore, Seif worked in investment banking for RBC Capital Markets.

The deal marks the second large investment Allianz X has made in the Canadian financial sector in as many years. In 2019, the German firm partnered with Power Financial Corp. on a $100 million investment in online trading platform Wealthsimple.