A Wealthsimple Trade app icon is shown on a smartphone on Tuesday, Dec. 15, 2020. THE CANADIAN PRESS/Jesse Johnston

A Wealthsimple Trade app icon is shown on a smartphone on Tuesday, Dec. 15, 2020. THE CANADIAN PRESS/Jesse Johnston

Drake, Ryan Reynolds among latest Wealthsimple backers in $750 million funding round

Wealthsimple began as an online investment manager in 2014

A new financing deal involving plenty of star power and venture capital investors has pushed Wealthsimple’s valuation to $5 billion and has its CEO anxious to build the brand even further.

The Toronto-based financial services business announced Monday that it has raised $750 million from six celebrities and more than 15 venture capital investment firms including Meritech, Greylock, Dragoneer and iNovia.

The star-studded list of investors includes rapper Drake, actors Ryan Reynolds and Michael J. Fox, NBA players Kelly Olynyk and Dwight Powell and NHL all-star Patrick Marleau.

“It’s incredibly exciting and feels great, but I am notoriously a bad person at celebrating things, so I’m already thinking about what’s next and where we have got to go,” Wealthsimple co-founder and CEO Mike Katchen said hours after announcing the financing.

He plans to use the new cash to expand Wealthsimple’s market position, build out its offering of products and grow its team.

Wealthsimple, which began as an online investment manager in 2014, has grown to add Wealthsimple Trade, a commission-free stock trading platform, and Wealthsimple Crypto, which allows users to buy, sell and hold cryptocurrency assets.

It also launched Wealthsimple Cash, a peer-to-peer money transfer app, earlier this year and offers automated investing, saving and tax filing products.

“We are really trying to become the full-service financial partner, the primary financial relationship in our clients lives,” Katchen said.

“We’ve come a long way and we’re offering a pretty big breadth of services to get there, but we have still got a long way to go to the services we offer.”

Part of that long way to go, he said, will include broadening Wealthsimple’s suite of services again and exploring how its current offerings can provide even more value to customers.

Katchen admitted that he has his eye on an initial public offering, too.

He feels it’s the best way to build a lasting brand, but said “it’s just a question of timing.”

“We want to focus on executing our plan and many of those short-term questions that get introduced when you’re going public can be a distraction,” he said.

“We’re just not going to deal with that for the time being, but it is for sure in the plan still.”

For now, Katchen has big decisions to make around deploying his new war chest and a pandemic still to navigate.

While many businesses have struggled during the crisis and had to turn to layoffs, closures and even bankruptcies, the pandemic boosted Wealthsimple.

Katchen noticed people increasing the attention they paid to their finances and many were able to save larger-than-expected amounts of cash they wanted to invest or collect compounded interest on.

He said it sparked “unprecedented” levels of activity in Wealthsimple’s trading and cryptocurrency businesses.

“I never would have guessed that COVID would have this remarkable tailwind for the investment industry,” Katchen said.

To address those demands, the company scaled as much as it could, while also trying to educate consumers about financial tools.

Education has long been a cornerstone for Wealthsimple, which has marketed itself as an easy-to-understand investment company operating a website peppered with explainers for investing newcomers.

Katchen believes that ethos and branding helped Wealthsimple hook celebrity investors.

“When we were introduced to them to talk about this investment opportunity, they already had some affinity for the company,” he said.

“I think they love seeing a Canadian company be successful, all of them are Canadian, and so there was just an easy conversation to bring them on board.”

It wasn’t Wealthsimple’s first time raising big bucks. The company snagged $114 million from TCV, Greylock and Meritech at a $1.5 billion post-money valuation last October.

The last time Meritech and Greylock co-led a funding round was the Facebook Series B in 2006, Wealthsimple said.

“We invest in companies with the potential to revolutionize industries and become enduring market leaders,” said Meritech’s general partner Max Motschwiller, in a release.

Wealthsimple has been able to capture a generation of financial consumers in Canada with financial products that are markedly different than anything offered by the incumbents — simpler, more human, and built with the kind of technology that delivers an experience consumers want.”

Meritech has also invested in Salesforce, Nextdoor, Zulily and Lime, while Greylock has backed Airbnb, LinkedIn, Coinbase and Discord.

Tara Deschamps, The Canadian Press


Like us on Facebook and follow us on Twitter.

economyFinanceStocks

Just Posted

Masset Habour Days will be from May 21 to 25 in 2021, in a family-friendly safe environment. A parade in 2018 was a highlight of a previous Harbour Days celebration. (File Photo)
Birds, boats and blooms are featured in 2021 Harbour Days

Community festival runs from May 21 to 25 in Masset

Kayak the humpback whale was found dead on a Haida Gwaii beach on Saturday, May 15, 2021. (Marine Education and Research Society)
Kayak the humpback whale found dead on Haida Gwaii beach

Whale was estimated to be only 18 years old

“Skeena,” by John Hudson and Paul Hanslow is one of five fonts in the running to become the default for Microsoft systems and Office programs. (Black Press Media File Photo)
Font named after Skeena River could become the next Microsoft default

One of the five new fonts will replace Calibri, which has been Microsoft’s default since 2007

A prowling coyote proved no match for a stray black cat who chased it out of a Port Moody parking lot Friday, May 14. (Twitter/Screen grab)
VIDEO: Little but fierce: Cat spotted chasing off coyote by Port Moody police

The black cat is seen jumping out from under a parked car and running the wild animal out of a vacant lot

Troy Patterson, a Cadboro Bay 15-year-old, got a virtual meeting with B.C.’s environment minister months after he started an online petition calling for construction of the Coastal GasLink pipeline to stop. (Jake Romphf/News Staff)
B.C. teen’s 23,000-name Coastal GasLink petition gets him an audience with the minister

15-year-old Saanich high school student and George Heyman discussed project for about 30 minutes

Announced Tuesday, May 18 by Public Safety Minister Mike Farnworth, the province added gyms, dance and fitness studios to its list of places where face coverings are mandatory (AP/Steven Senne)
Masks now required at all times inside B.C. gyms, including during workouts

Those who disobey could be subject to a $230 fine

Reinhard “Bud” Loewen of Abbotsford has now been charged with 21 counts of sexual assault related to his massage business. (Facebook photo)
Former Abbotsford masseur now faces 21 counts of sexual assault

Bud Loewen of Bud’s Massage Therapy initally faced three charges

Over the years, police have worked with sketch artists to draw what the boys could have looked like at the times of their deaths. (Vancouver Police Department)
DNA breakthrough expected in cold case involving murdered Vancouver boys, 7 and 8

Forensic analysts are working to identify relatives of the children, whose bodies were found in Stanley Park in 1953

Livestock competitions have been part of the Pacific National Exhibiton for more than a century. (Maple Ridge News files)
B.C. provides $50 million to keep major tourist attractions going

Tour bus companies also eligible for latest COVID-19 aid

Join Black Press Media and Do Some Good
Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Derek Descoteau with his trusty dog Harvey. (Photo submitted)
Friends provide continuing comfort for family in wake of unresolved senseless B.C. murder

Case remains before the courts five years after Derek Descoteau’s abrupt stabbing death in Chemainus

The top photo is of a real carbine rifle, while the bottom photo is the airsoft rifle seized from a Kelowna man on May 15. (Contributed)
RCMP issue warning: ‘Imitation firearms need to be dealt with responsibly’

A man brandishing his airsoft rifle in public had his weapon seized by Mounties on Saturday

Most Read