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

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Skeena Bulkley-Valley MP Taylor Bachrach has been working across party lines to have rail safety issues addressed. An April 27, 2020 train derailment blocked five intersecting tracks on the CN rail line in Prince Rupert close to the waterfront on Bill Murray Drive. (Photo: K-J Millar/The Northern View)
Bachrach pushes for rail safety and wants NW voices to be heard

Residents and community leaders are concerned about safety and preparedness in the NW

Over 8000 BC Hydro customers have been affected by the power outage. (BC Hydro outage map)
Power outage affects 8000 BC Hydro customers in Prince Rupert area

BC Hydro has assigned crews to restore power

Josie Pottle rocks out to placing painted rocks by more than 14 different Prince Rupert childcare organization staff and tots for rock gardens around the city to mark May as Childcare Awareness month. (Photo: K-J Millar/The Northern View)
Childcare month is rocking it in Prince Rupert

More than 14 local childcare organizations participated in making rock gardens

Volunteers at the AFFNO drive-in movie theatre night at the Jim Ciccone Centre on May 8, directed traffic and braved the rain before the movies started. (Photo: K-J Millar/The Northern View)
It was lights, camera, action for AFFNO’s drive-in movie night

Volunteers and moviegoers watched a double feature in both official languages

Pembina Prince Rupert Terminal has entered into a one-year agreement with Mitsui & Co. for the majority of its production for supply to the Asian markets, Pembina announced on May 6th. (Photo: Supplied
Prince Rupert Terminal highlighted in Pembina first quarter

Pembina announced one-year agreement with Mitsui & Co. to supply Asian market

A bullet hole is seen in the windshield of an RCMP vehicle approximately 4 km from Vancouver International Airport after a one person was killed during a shooting outside the international departures terminal at the airport, in Richmond, B.C., Sunday, May 9, 2021. THE CANADIAN PRESS/Darryl Dyck
Homicide team IDs man in fatal YVR shooting as police grapple with spate of gang violence

Man, 20, charged in separate fatal shooting Burnaby over the weekend

Kelowna resident Sally Wallick helped rescue a kayaker in distress a week and a half ago. (Sally Wallick/Contributed)
VIDEO: Kelowna woman rescues capsized kayaker in Okanagan Lake

Sally Wallick is asking people to be prepared for the cold water and unpredictable winds

Dr. Bonnie Henry talks about phase two in B.C.’s COVID-19 immunization plan. THE CANADIAN PRESS/Chad Hipolito
All of B.C. will eventually ease out of COVID-19 restrictions at same time: Henry

People who have received two doses of a vaccine can’t yet return to post-pandemic activities with each other, she says

Winnipeg Jets’ Andrew Copp (9) and Edmonton Oilers goaltender Mike Smith (41) watch an incoming shot during second period NHL action in Winnipeg, Monday, April 26, 2021. THE CANADIAN PRESS/Fred Greenslade
‘Very jealous’: Canadian teams can’t take advantage of NHL’s relaxed COVID-19 rules

League eased some tight COVID-19 health and safety protocols over the weekend for fully vaccinated clubs

A map of Huu-ay-aht-owned forestry cutblock. (SUBMITTED PHOTO)
B.C. First Nations restrict access to territory in wake of forestry standoffs

Huu-ay-aht set up checkpoints after heated and dangerous incidents on southwest Vancouver Island

RCMP are searching for Philip Toner, who is a ‘person of interest’ in the investigation of a suspicious death in Kootenay National Park last week. Photo courtesy BC RCMP.
RCMP identify ‘person of interest’ in Kootenay National Park suspicious death

Police are looking for Philip Toner, who was known to a woman found dead near Radium last week

Vancouver Canucks goaltender Thatcher Demko (35) makes a save on Winnipeg Jets’ Nate Thompson (11) during second period NHL action in Winnipeg, Monday, May 10, 2021. THE CANADIAN PRESS/Fred Greenslade
Vancouver Canucks see NHL playoff hopes dashed despite 3-1 win over Winnipeg

Montreal Canadiens earn final North Division post-season spot

The B.C. legislature went from 85 seats to 87 before the 2017 election, causing a reorganization with curved rows and new desks squeezed in at the back. The next electoral boundary review could see another six seats added. (Black Press files)
B.C. election law could add 6 seats, remove rural protection

North, Kootenays could lose seats as cities gain more

The Independent Investigations Office of B.C. is investigating the shooting of an Indigenous woman in the Ucluelet First Nation community of Hitacu. (Black Press Media file photo)
B.C. First Nation wants ‘massive change’ after its 3rd police shooting in less than a year

Nuu-chah-nulth woman recovering from gunshot wounds in weekend incident near Ucluelet

Most Read