Our sixth annual Bay Street Bull 30X30 guide showcases a group of incredible individuals who are redefining the way we do business, championing their communities, and cultivating entirely new industries. From tech and environmental pioneers to cryptocurrency entrepreneurs and media trailblazers, each of this year’s inductees is challenging Canadians to think (and work) differently for a brighter future. 

In our series of one-on-one interviews, get to know each honouree a little better: their values, mission, lessons learned, and best advice. 

Josh Baker and Hayden James

Co-founders, Fraction

 

What is your elevator pitch to the world?

Fraction: Fraction makes finance fair. We’ve reimagined the entire mortgage process in a new, innovative way for homeowners to access their home equity. The Fraction Mortgage has no monthly payments and no hidden fees. We’ve removed all of the confusing jargon that comes with most financial products so homeowners can find the right financial solution to meet their various needs. 

Homeowners can use the cash for anything—paying off credit-card debt, starting a business, or buying a second home. We offer five and 10-year terms, but clients can exit the loan whenever they want with no penalty. When the term ends, the house sells, or the homeowner exits the loan, Fraction is paid based on the appreciated growth of the home.

We keep things simple and fair to empower homeowners to build a better financial future for themselves and their families.

What excites you most about the work that you are doing?

Fraction: Both of us are excited at a new vision for finance: a fairer one that provides people with the solutions they need to live life on their terms. 

Where do you think you have made the most impact in your community?

Fraction: Fraction is possibly the first innovative mortgage product in around 100 years. Offerings like ours allow homeowners to take more ownership of their homes and financial futures. 

Along with a shift in how people view homes in the grand scheme of their financial worth and assets, a more significant, more intangible change is taking place. Innovations in fairness and transparency are taking place in a traditionally stodgy space. This mindset shift will set the tone for the types of financial, mortgage, and proptech companies that will emerge down the road. 

What are some of the biggest innovations you are seeing in terms of how proptech startups are looking to solve problems within the real estate industry?

Fraction: One of the biggest challenges with proptech and the real estate industry in general is the lack of transparency in data. This is primarily due to the stranglehold the MLS’s have on their listing data and historical data. So much wonderful innovation could be unlocked by that data being publicly available. Accordingly, any companies that are innovating in that space are going to have huge, multiplying effects.

How do you address any initial hesitancy that users may have when they contemplate using a platform like yours?

Fraction: The relationship between borrower and lender has been fraught with mistrust. This has been a conscious choice on behalf of many financial institutions and lenders who actively attempt to convolute messaging and impose unnecessary fees and penalties on borrowers. 

The industry has always favoured the lender. But companies like ours are emerging and built with the borrower in mind. We champion fairness and transparency, and above all, we want our homeowners to understand the power they have in accessing their equity. 

Why has there never been a better time than now for a company like yours to come to fruition? 

Fraction: Things are rapidly changing across the world. A once bullish market seems to be taking on a bear shape, and no one is being spared. Now is not the time to spend. Instead, it is the best time for Canadians to find ways to save. Fraction can help homeowners reduce how much they spend monthly servicing and paying their debt. 

By tapping into their hard-earned home equity with a variable-rate mortgage like ours, Canadians can weather whatever economic shifts come their way this year. 

What is your philosophy around problem-solving with respect to your industry? How do you like to approach problems and solutions? 

Fraction: When we were building Fraction, we started with a simple question: could there be a fairer way to help people access the equity locked in their homes? Thanks to our tech background, our team approached long-standing problems in the financial services industry differently from the incumbents. We looked at the problem from the homeowner’s perspective, not the bank’s.

We use this formula for many of our business decisions: what is the fairest and more transparent way to help the most people?

Where do you see the future of your industry going? What excites you most about the road ahead?

Fraction: The digitalization of finance and the use of alternative data to provide access to credit is a very exciting time in history. It opens up a lot more opportunities for people to manage and create wealth than ever before. 

Helping to fix the intergenerational cycle of real estate by increasing access for both homeowners and investors in a mutually beneficial way is super promising and will hopefully lead to a more equal society. Fundamentally using technology to scale what we are doing helps us accelerate this impact and provide the best user experience possible.

How has the word “impact” manifested in your work? 

Fraction: Impact and the change we can make in the real estate market have been driving factors of what we have built here at Fraction.

We’ve helped homeowners find life-impacting solutions to problems in the last year. We have, on average, helped homeowners reduce their debt to income ratio (the amount you spend monthly paying back debt) by up to 50% on average simply by eliminating monthly payments. We also help raise the credit scores of our borrowers by 30 points on average. 

These numbers are life-changing for many. It can mean a life with fewer stresses, worries, and an assurance of security for themselves and their loved ones. We help unlock potential and possibility. 

What is one lesson that you hope people will learn or walk away from your work?

Fraction: That you can be an innovative and profitable fintech that focuses on the needs of your customers, without having to play by the same old rules as your predecessors.

What has been your proudest moment as an entrepreneur? Your biggest milestone?

Hayden James: A big one was telling my wife that this crazy thing we were building was actually going to be a real job. For me, it’s not the big accomplishments that matter so much as working with really talented people who share the same passion and ambition as we do.

Josh Baker: I think it was witnessing the professional growth across my team. Watching someone go from an individual contributor to becoming a manager and really excel at their role was extremely rewarding.

 

Why does your work matter?

Hayden James: Our own family members have used our products and we have seen the impact it can have, first-hand. Financial independence leads to a higher quality of life and better happiness. We want to make sure everyone has a chance to experience that. Everyone deserves to. 

Josh Baker: I just believe that this product should exist. Whether it ends up being us that succeeds long-term or someone else, I just really want this to exist for people. I’m glad to have started it.

What have you learned about yourself as you’ve built your company and raised your voice?

Josh Baker: That there’s no such thing as an overnight success. After years of grinding away on Fraction, it’s been fascinating to see how many people come up to us and say how shocked they are with how quickly it got off the ground. When in reality, it took ages for us to figure out how to get the company, the brand and the product to where it is today!

What is a major career goal that you have set your sights on and hope to accomplish in 2022? 

Josh Baker: I’d like to continue growing the team and learn how to manage that growth in a way that keeps the team happy and motivated.

 

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Feeling inspired? Meet the rest of Bay Street Bull’s 30X30