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

The District of Ucluelet is fast-tracking temporary use permits for RVs/campervans as seasonal housing. (Westerly file photo)
Ucluelet reviews 11 applications for RVs as seasonal housing

“Housing is so essential to everyone, and an issue that cases a lot of stress to business owners.”

Parks Canada and Tla-o-qui-aht public works dig the washed up Princess M out from sand along the south shore of the Pacific Rim National Park Reserve. (Nora O’Malley photo)
Rescue attempt costs man his boat off Pacific Rim National Park Reserve

Coast Guard response questioned after volunteer responder’s speedboat capsizes in heavy swells

A B.C. Centre for Disease Control map showing new COVID-19 cases by local health area for the week of April 25-May 1. (BCCDC image)
Vancouver Island’s COVID-19 case counts continue to trend down

Fewer than 200 active cases on the Island, down from highs of 500-plus earlier this spring

Hotel Zed Tofino. (Westerly file photo)
Two Tofino businesses up for building awards

14th annual Vancouver Island Real Estate Board Commercial Building Awards

(The Canadian Press)
Trudeau won’t say whether Canada supports patent waiver for COVID-19 vaccines

‘Canada is at the table to help find a solution’

A sign indicating face coverings are required by the establishment is pictured on the front door of a business in Vancouver, B.C., Friday, April 9, 2021. COVID-19 cases have been on a steady increase in the province of British Columbia over the past week. THE CANADIAN PRESS/Jonathan Hayward
A sign indicating face coverings are required by the establishment is pictured on the front door of a business in Vancouver, B.C., Friday, April 9, 2021. COVID-19 cases have been on a steady increase in the province of British Columbia over the past week. THE CANADIAN PRESS/Jonathan Hayward
B.C. to start releasing neighbourhood-specific COVID numbers after data leak

Documents obtained by the Vancouver Sun show cases broken down by neighbourhoods

Ladysmith RCMP safely escorted the black bear to the woods near Ladysmith Cemetary. (Town of Ladysmith/Facebook photo)
Black bear tranquillized, relocated after wandering around residential Ladysmith

A juvenile black bear was spotted near 2nd Avenue earlier Friday morning

Provincial health officer Dr. Bonnie Henry and Health Minister Adrian Dix update B.C.’s COVID-19 situation at the B.C. legislature, April 29, 2021. (B.C. government)
B.C.’s COVID-19 case count creeps up, seven more deaths

445 people in hospital, 157 in intensive care

Summerland’s positive test rate is much higher than surrounding local health areas, according to internal BC CDC documents. (BC CDC)
Summerland 3rd behind Surrey, Abbotsford in daily per capita COVID-19 cases

Interior Health is rolling out additional vaccine availability to the community

Amazon is pausing its Prime Day marketing event in Canada this year amid ongoing COVID-19 outbreaks at its facilities in Ontario. THE CANADIAN PRESS/Nathan Denette
Amazon Prime Day halted in Canada due to COVID-19 outbreaks in warehouses

The event was postponed to protect the health and safety of employees and customers, the company says

Ally Thomas, 12, seen in an undated family handout photo, died on April 14 from a suspected overdose. Her family says they are frustrated more public supports weren't available when they tried to get her help. THE CANADIAN PRESS
Minister says suspected overdose death of 12-year-old pushing B.C. to ‘do better’

Minister Sheila Malcolmson of Mental Health and Addictions says the government is working ‘as hard as we can’ to build a system of care for youths

At this Highway 3 check point, police officers will be asking for identification from drivers, documentation regarding the driver’s name and address, and the purpose for the driver’s travel. (RCMP)
No fines handed out at 1st COVID-19 roadblock as checks move across B.C.

Cpl. Chris Manseau says a total of 127 vehicles were stopped at a roadblock in the Manning Park area

A spectator looks on as the Olympic Caldron is relit in downtown Vancouver, Wednesday, February 12, 2020. THE CANADIAN PRESS/Jonathan Hayward
Small majority of B.C. residents in favour of a Vancouver 2030 Olympic bid: survey

A new survey shows a split over the possibility of public money being spent to organize and host the winter games

Most Read