Wealthsimple CEO talks $30M Investment and the future of financial industry

Wealthsimple made waves this week with the announcement that it had secured a $30 million Series A investment from a financial giant Power Financial Corp. BetaKit caught up with Michael Katchen, CEO and founder of Wealthsimple, to talk about his vision for the company and what this investment means for Canadian investors and the financial industry.

“With Power Financial as our new partner, we are poised to build a transformative company that makes smarter investing simple, accessible, and affordable for everyone in Canada,” read the company’s statement. Katchen says thinking big is he key to his company’s success. “We’re excited about what this means to Canadian investors. From day one, we’ve set out to build a new kind of investment management company. we think Canada can have a bigger global presence on the marketplace for technology companies. Wealthsimple is set to reshape financial industry,” Katchen told BetaKit.

wealthsimple and power financial corporation

Katchen launched Wealthsimple just seven months ago with an impressive $1.9 million Canadian seed round raised in record time, securing early votes of confidence from Dan Debow, Roger Martin, David Ossip, Andrew D’Souza, and other investors. Wealthsimple handles portfolio management and investment decisions, and automates all of the back office to deliver investment advice at a fraction of the cost. As a result, the company is making good investment advice more accessible to the younger investors. The company calls this new service category ‘Light Advice’, defining it as a combination of technology and real people to deliver a smarter investment service and personalized client experience at lower cost.

Power Financial threw its weight behind the new ‘Light Service’ model. “Wealthsimple offers an innovative solution that complements the demographics serviced by our other financial services brands,” stated Stéphane Lemay, VP at Power Financial in the official announcement. “We believe in the value of financial advice for everyone and see the Wealthsimple model as a way to appeal to under-served segments of the Canadian population like millennials and those with more modest assets. Wealthsimple has been able to reach this market.”

Katchen met with Power Financial early on and kept in touch, because both companies saw the potential for collaboration. Katchen sees the partnership and the resulting $30 million investment as a substantial vote of confidence in the company, the team, and the product.

“As a startup, we struggled with building trust. It’s great to have a long-term strategic partner.”

“As a startup, we struggled with building trust – clients questioned our ability to handle their investments, and worried if we’d even be around a few years from now,” he said. “It’s great to have a long-term strategic partner, since we can now can offer a peace of mind to our clients.“

Katchen is looking to hire aggressively, and potentially double or triple his current team of 12 within the next year. Wealthsimple will need developers, financial advisors, and marketers to improve the experience, build better products, and hone the existing model. Wealthsimple acquired more than 1000 clients in less than a year, handling investment portfolios anywhere from $5,000 to millions, and 80% of its clients are Canadians under 45.

“We think Canada can have a bigger global presence on the marketplace for technology companies,” Katchen told BetaKit. “We’re really excited about the Canadian partner, and to make this a Canadian product. From day one, we’ve set out to build a new kind of investment management company.”

“This partnership validates the platform and the team, and gives us resources to reshape financial services in Canada. Dream big and work with people who are way smarter than you. We feel very fortunate to be in that position so soon after launching.”

Elena Yunusov

Elena Yunusov

Elena Yunusov works at the intersection of digital communications and experience design. She is known in Toronto’s startup community as a HoHoTO & Toronto Maker Faire co-organizer. She likes coffee, robots, and wearable tech.