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

Nurses at the Cowichan District Hospital are thanking the community for following the health protocols during the ongoing COVID-19 pandemic. Pictured from left are nurses Jacqueline Kendall, Melissa Bustard and Heidi Ferris. (Robert Barron/Citizen)
Pandemic year like no other, Cowichan nurses say

May 10-16 is National Nursing Week

Island Health’s new Wellness and Recovery Centre at 5878 York Rd. is now planned to be open in the fall. (File photo)
Wellness and Recovery Centre now to open in the fall

Three community dialogues scheduled for May

B.C. Centre for Disease Control data showing new cases by local health area for the week of May 2-8. (BCCDC image)
Vancouver Island COVID-19 local case counts the lowest they’ve been all year

On some areas of Island, more than 60 per cent of adults have received a vaccine dose

A nurse gets a swab ready to perform a test on a patient at a drive-in COVID-19 clinic in Montreal, on Wednesday, October 21, 2020. THE CANADIAN PRESS/Paul Chiasson
Island’s daily COVID-19 case count drops below 10 for just the second time in 2021

Province reports 8 new COVID-19 cases on Vancouver Island Wednesday

Before you take on a pet, make sure you want to have it for life. (Sarah Simpson/Citizen)
Editorial: A pet is a lifetime commitment

Tons of people are getting pets during the pandemic, some for the first time

Prince Rupert was one of the first B.C. communities targeted for mass vaccination after a steep rise in infections. Grey area marks community-wide vaccine distribution. (B.C. Centre for Disease Control)
B.C. tracks big drop in COVID-19 infections after vaccination

Prince Rupert, Indigenous communities show improvement

The bodies of Carlo and Erick Fryer were discovered by a local couple walking on a remote forest road in Naramata on May 10. (Submitted)
Kamloops brothers identified as pair found dead near Penticton

The bodies of Carlo and Erick Fryer were discovered by a local couple walking

Municipal governments around B.C. have emergency authority to conduct meetings online, use mail voting and spend reserve funds on operation expenses. (Penticton Western News)
Online council meetings, mail-in voting option to be extended in B.C.

Proposed law makes municipal COVID-19 exceptions permanent

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

A nurse prepares a dose of the COVID-19 vaccine in Kelowna on Tuesday, March 16. (Phil McLachlan/Black Press)
British Columbians aged 20+ can book for vaccine Saturday, those 18+ on Sunday

‘We are also actively working to to incorporate the ages 12 to 17 into our immunization program’

The AstraZeneca-Oxford University vaccine. (AP/Eranga Jayawardena)
2nd person in B.C. diagnosed with rare blood clotting after AstraZeneca vaccine

The man, in his 40s, is currently receiving care at a hospital in the Fraser Health region

Canada’s demo Hornet soars over the Strait of Georgia near Comox. The F-18 demo team is returning to the Valley for their annual spring training. Photo by Sgt. Robert Bottrill/DND
F-18 flight demo team returning to Vancouver Island for spring training

The team will be in the Comox Valley area from May 16 to 24

Saanich police and a coroner investigated a fatal crash in the 5200-block of West Saanich Road on Feb. 4, 2021. (Devon Bidal/News Staff)
Police determine speed, impairment not factors in fatal Greater Victoria crash

Driver who died veered across centre line into oncoming traffic for unknown reason, police say

Ladysmith RCMP safely escorted the black bear to the woods near Ladysmith Cemetary. (Town of Ladysmith/Facebook photo)
Bow-legged bear returns to Ladysmith, has an appointment with the vet

Brown Drive Park closed as conservation officers search for her after she returned from relocation

Most Read