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

File photo (Aaron Hemens/Capital News)
Overturned kayak in Mission Creek prompts police response

Kelowna RCMP is looking to speak with anyone who may know the individual associated with the kayak

A drug bust on Government Street in Duncan on Tuesday, March 30, led to a "substantial seizure" according to the North Cowichan/Duncan RCMP. (File photo)
Search continues for diver who went missing in Okanagan Lake

Search and rescue, RCMP underwater recovery team looking for diver missing since Saturday afternoon

Rutland Senior Secondary (Barry Gerding/Black Press)
UPDATE: List of Kelowna school COVID-19 exposures expands

School District 23 says two more schools have been exposed to the virus

A man and woman, both 33 and from Kelowna, were arrested on Postill Lake Forest Service Road in possession of two stolen vehicles Friday, May 14, 2021. (File photo)
Kelowna duo arrested with stolen vehicles after ‘brief’ bicycle getaway attempt

A man and a woman were arrested on a forest service road on numerous pending charges

The warm weather means time for a camping trip, or at least an excursion into nature. How much do you know about camps and camping-related facts? (John Arendt - Summerland Review)
QUIZ: Are you ready to go camping?

How many camp and camping-related questions can you answer?

Daily confirmed COVID-19 cases reported to B.C. public health, seven-day rolling average in white, to May 12, 2021. (B.C. Centre for Disease Control)
B.C. preparing ‘Restart 2.0’ from COVID-19 as June approaches

Daily infections fall below 500 Friday, down to 387 in hospital

Penticton city parks staff were busy this week using the beach grater to sift through sand, getting the shores ready for beach season. When it comes to beach clean up they are collecting run-off debris, pulling weeds and picking up litter. (Penticton photo)
Hottest day of the year, so far, in the South Okanagan

Penticton city park staff cleaned up the beaches getting ready for the season

KCR Migrant Support Worker, Javier, had an exciting day escorting his son Ian with him during ‘Take your Child to Work Day’!
KCR: Volunteering is being part of a whole

KCR Community Resources shares stories of its volunteers in a weekly column

Sicamous RCMP Sgt. Murray McNeil and Cpl. Wade Fisher present Cody Krabbendam of Ranchero with an award for bravery on July 22, 2020. (Contributed)
B.C. boy receives medal of bravery, scholarship for rescue of child at Shuswap beach

Last summer Cody Krabbendam jumped into the lake to save another boy from drowning

This is what the glowing boulders look like at night at 28 Huth Ave. (Submitted)
PHOTOS: Glowing boulders popping up in the Okanagan

Local landscaper Brandon Messier also brought the Lost statue to its new home

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

Coldstream Fire Department is on-scene Sunday, May 16, battling a fire in a Matner Lane orchard just up the hill from the firehall on Aberdeen Road. (Jennifer Smith - Morning Star)
Okanagan fire crew tackles orchard blaze

Fire broke out just before 2 p.m. on Matner Lane, which is just up the hill from the Coldstream firehall on Aberdeen Road

Someone or something is vandalizing birdhouses built and erected along Salmon Arm’s Foreshore Trail, much to the chagrin of a Shuswap biologist who looks after the houses. All but one of 32 along the trail are occupied. (Facebook photo)
Ongoing birdhouse vandalism rocks Shuswap trail, groups

Eight more boxes were destroyed Saturday, May 15

Most Read