Toronto-based FinTech firm Wealthsimple has announced that it has signed a Series E round of up to $750 million CAD at a post-money valuation of $10 billion.
This represents double the company’s $5-billion valuation a year ago. It comes on the heels of significant growth for Wealthsimple, which revealed last week at its product showcase that it had doubled its total assets under administration (AUA) over the past year to $100 billion—three years ahead of schedule.
Wealthsimple is profitable, caters to more than three million clients, and is poised to become Canada’s most valuable private venture-backed tech company, vaulting ahead of peers like Cohere, Hopper, and 1Password. The round is expected to close in the fourth quarter of this year.
With the new funding, Wealthsimple is poised to become Canada’s most valuable private venture-backed tech company.
The Series E includes both a $550-million primary offering and a secondary offering of up to $200 million. Existing American backer Dragoneer Investment Group is co-leading with new investor GIC, the Singaporean sovereign wealth fund. Fellow new investor Canada Pension Plan Investment Board (CPP Investments) is supporting alongside existing backers Power Corporation of Canada (Power) and Power subsidiary IGM Financial, as well as US-based Iconiq, Greylock, and Meritech.
Power is Wealthsimple’s largest shareholder and announced that its interest will remain “substantially unchanged” following the financing.
“This raise reflects deep confidence from new and returning investors in our mission and our role as a defining Canadian company,” Wealthsimple co-founder and CEO Michael Katchen said in a statement. “We were intentional in choosing partners committed to the long-term future of Wealthsimple. These are well-respected, global leaders with a proven track record scaling category leaders, and who believe in our vision for the future of financial services.”
Wealthsimple plans to use this funding to accelerate its product roadmap across investing, spending, and credit, and pursue strategic opportunities to expand its platform.
Wealthsimple started in 2014 as a robo-adviser but has since broadened its investment capabilities and moved into other areas of money management, like banking, wooing wealthier clients and more sophisticated traders as part of its quest to build “a full-service financial solution” for Canadians as it works towards $1 trillion in AUA by 2034.
“Few companies have achieved what Wealthsimple has in the last few years,” Dragoneer partner Christian Jensen said in a statement. “Wealthsimple’s product velocity, customer obsession, and category leadership remind us of some of the most enduring global companies and we’re thrilled to be partnering with them in this next phase of growth.”
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A Wealthsimple spokesperson told BetaKit that the company will continue to explore strategic mergers and acquisitions as it looks to expand its 1,000-person team. Wealthsimple recently acquired Montréal’s Fey to bolster its investment research capabilities and San Francisco-based wealth management platform Plenty to expand its offerings for families.
Such a large financing with a significant secondary component could alleviate some of the immediate pressure Wealthsimple might feel to go public, giving the company similar optionality to Clio’s Series F last year. When asked how this round impacts Wealthsimple’s initial public offering (IPO) plans, the company spokesperson said the FinTech firm’s goal remains to go public one day, but said it does not have any updates to share regarding timing.
The Series E marks Wealthsimple’s second major financing in the past five years, after the company announced another $750-million round (consisting of $500 million in secondary and $250 million in primary capital) in May 2021. Meritech, Greylock, Iconiq, and Dragoneer were among the buyers in that financing, while Power and IGM Financial sold a portion of their shares in the deal. Last year, Iconiq reportedly upped its stake by buying another $100 million worth of Wealthsimple shares from the company’s current and former employees.
Prior to this round, Wealthsimple had raised $630 million in total primary capital to date. Wealthsimple declined to share revenue or profitability numbers, disclose secondary share sellers, or confirm whether this round will involve any changes to the company’s board of directors.
Last week, Wealthsimple unveiled a suite of products and services meant to give its customers more advanced investing options and tools at a lower cost. The FinTech company was also named as part of the Bank of Canada’s first batch of registered payment service providers.
Disclosure: Wealthsimple vice-president of payments strategy and chief compliance officer, Hanna Zaidi, sits on BetaKit’s board of directors.
Feature image courtesy Wealthsimple.