Canadian robo-advisor Wealthsimple lands unicorn standing with $87m elevate – FinTech Futures


Wealthsimple, the Toronto-founded wealth administration platform working in Canada, the UK and US, has landed CAD 114 million ($87 million), taking it to a $1 billion valuation.

Know-how Crossover Ventures (TCV), the investor which led Revolut’s half a billion-funding spherical again in February, led the spherical.

Different buyers within the spherical embody Greylock Companions, Meritech Capital Companions, Two Sigma Ventures and the tech funding arm of Munich-based insurer Allianz.

Wealthsimple serves some 1.5 million customers

As a part of the brand new funding, David Yuan, normal associate at TCV, will be part of Wealthsimple’s board of administrators. The funding additionally marks the primary time fellow backer Meritech has invested within the Canadian market.

What’s Wealthsimple?

Wealthsimple is round 70% owned by Energy Monetary, a Energy Company of Canada subsidiary managed by the rich Desmarais household.

Following this $87 million funding spherical, these buyers, who’ve poured a complete of $315 million into Wealthsimple, will personal a 60% stake.

The fintech began off as a robo-advisor again in 2014. It has since expanded its providing – most drastically this 12 months.

Its rising 1.5 million prospects now have entry to a financial savings account, tax-filing software program and a cryptocurrency-trading function.

The beginning-up claims it helped multiple million Canadians file their taxes this 12 months. This follows its acquisition of tax preparation app, SimpleTax, again in September 2019.

Wealthsimple’s CEO, Mike Katchen, tells BetaKit that “accountable credit score” merchandise akin to mortgages, in addition to insurance coverage choices, are on the fintech’s roadmap.

But it surely’s the start-up’s no-commission, Wealthsimple Commerce service, which has seen the actual development this 12 months.

Inventory buying and selling platform development

Stay in Canada since March 2019, prospects have surged since, particularly throughout the pandemic-induced buying and selling increase.

From the start to the top of 2019, buying and selling prospects greater than doubled from 100,000 to 250,000. This noticed belongings soar from CAD 4.3 billion ($3.3 billion) to CAD 6.3 billion ($4.8 billion).

Then within the first six months of 2020, buying and selling prospects doubled to greater than half 1,000,000. Belongings shot as much as greater than CAD 8.4 billion ($6.4 billion).

In line with Wealthsimple’s CEO, Katchen, the fintech captured the second largest variety of new buying and selling shoppers in Canada within the first half of 2020, behind solely Toronto-Dominion Financial institution.

A special strategy to Robinhood?

Not like different buying and selling apps like Robinhood, Wealthsimple doesn’t supply dangerous bets, akin to choices buying and selling.

Wealthsimple’s advertising and marketing messaging can be very completely different to Robinhood’s, regardless of frequent comparisons.

“Despite the fact that Wealthsimple is positioning itself as very aggressive on pricing, its advertising and marketing couldn’t be extra completely different than that of Robinhood,” Ian de Verteuil, a CIBC World Markets analyst, tells the Monetary Put up.

“The tagline ‘Get Wealthy Gradual’ hardly compares to the Robinhood strategy, which incorporates the potential for fractional shares and a ‘video-game like’ app.”

TCV cites this as a motive for its lead funding.

Yuan, the TCV normal associate becoming a member of the start-up’s board, explains: “Robinhood has carried out an incredible job at constructing sport mechanics round buying and selling, whereas Wealthsimple’s ethos is about wealth era over time, or getting wealthy slowly.”

Again in February, Wealthsimple’s Europe CEO Toby Triebel advised FinTech Futures: “Buying and selling apps are an afterthought. It’s like enjoying round and you may lose much more cash.

“You wouldn’t put all of your cash into buying and selling. 2019 has been nice for the inventory market however that may change – because the saying goes, my cat can decide shares higher than me.”

While Triebel would possibly nonetheless agree with this, Wealthsimple’s inventory buying and selling app development within the final six months factors to the function’s significance far above an “afterthought”.

Learn subsequent: How Canada’s Wealthsimple is building a whole financial suite


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