In a round led by Meritech and Greylock, Canada-based fintech Wealthsimple has secured $610 million (C$750 million) in funding. The investment takes the online brokerage’s total capital to more than $1 billion, more than triples the company’s most recent valuation to $4 billion, and represents one of the largest financings for a Canadian technology company to date.
“Seven years ago, we launched Wealthsimple with just four people and a mission that many thought was naive: use technology and innovation to revolutionize the finance industry so every Canadian could achieve financial freedom, no matter who they are or how much money they have,” Wealthsimple co-founder and CEO Mike Katchen wrote on the company’s blog this morning. “I’m happy to say that our mission doesn’t seem quite so naive anymore.”
Also participating in the round were DST Global, Sagard, Iconiq, Dragoneer, TCV, iNovia, Allianz X, Base 10, Redpoint, STEADFAST, Alkeon, TSV, and Plus Capital. A host of Canadian celebrities were also involved in the funding, including actors Ryan Reynolds and Michael J. Fox; athletes Kelly Olynyk, Dwight Powell, and Patrick Marleau; and singer Drake.
Since its inception in 2014, Wealthsimple has grown into a firm with more than two million users who enjoy commission-free stock trading, automated investing, as well as access to cryptocurrencies and tax services. This spring, the company introduced its cash app, which enables Canadians to send and receive cash “in seconds.” Free and requiring no minimum balance to use, Wealthsimple Cash has been likened to Venmo, a popular cash app in the U.S. The app currently has daily spending limits of $5,000 a day and $20,000 a month; Wealthsimple said that this is significantly more generous than what is available through the big banks.
Wealthsimple’s investment news comes as the Toronto, Ontario-based fintech pivots to pursue new opportunities in the Canadian market (the company sold its U.S. investment advisory business to Betterment in March). During the investing mini-mania surrounding Robinhood and shares of Gamestop earlier this year, investors in Canada were weighing in by making Wealthsimple’s trading app the number one app on Canada’s Apple App Store and on Google Play. This ratings boost was accompanied by a 50% gain in sign-ups and a 2x increase in trading volume. The environment created by the global pandemic, according to Wealthsimple’s Katchen, played a significant role in the company’s growth; 18% of the country’s new brokerage accounts in the first half of 2020 were opened on Wealthsimple’s platform.
Like a growing number of fintechs, Wealthsimple also plans to extend its offerings to include cash, checking, insurance, and mortgage products with the goal of becoming the customer’s “primary financial institution“. The company initially earned its unicorn status in October, after securing an investment of $93 million (C$114 million). Power Corporation of Canada is the company’s majority shareholder, with a 43% of the company post-financing.