Series E, valued at up to $750 million, includes primary offerings of $550 million and secondary offerings of $200 million.
Fintech company based in Toronto Wealth is simple announced it has signed a Series E round of up to C$750 million at a post-investment valuation of $10 billion.
This is double the company's performance $5 billion valuation a year ago. This comes on the heels of significant growth for Wealthsimple, which revealed last week At its product launch, the company said its total assets under management (AUA) doubled to $100 billion over the past year.three years ahead of schedule.
Wealthsimple is profitable, serves more than three million clients, and is poised to become Canada's most valuable privately held venture-backed technology company, ahead of competitors such as Approve, HopperAnd 1Password. The round is expected to close in the fourth quarter of this year.
With the new funding, Wealthsimple could become Canada's most valuable privately held venture capital-backed technology company.
Series E includes both a primary offering of $550 million and a secondary offering of up to $200 million. Existing US backer Dragoneer Investment Group is leading the project along with new investor GIC, Singapore's sovereign wealth fund. New investor partner Canada Pension Plan Investment Board (CPP Investments) is providing support along with existing sponsors 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 percentage will remain “virtually unchanged” after the funding.
“This increase reflects new and returning investors' deep confidence in our mission and our role as a defining Canadian company,” Wealthsimple co-founder and CEO Michael Katchen said in a statement. “We have deliberately chosen partners who are committed to the long-term future of Wealthsimple. They are respected global leaders with a proven track record of scaling leadership categories who believe in our vision for the future of financial services.”
Wealthsimple plans to use this funding to accelerate its investment, spending and lending roadmap and pursue strategic opportunities to expand its platform.
Wealthsimple began in 2014 as a robo-advisor but has since expanded its investment capabilities into other areas of wealth management such as banking, attracting wealthier clients and more sophisticated traders as part of its commitment to create a “full-service financial solution” for Canadians, aiming to $1 trillion in AUA by 2034.
“Few companies have achieved what Wealthsimple has achieved over the past 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 world’s most resilient companies, and we are thrilled to partner with them on their 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 strengthen its investment research capabilities and asset management platform in San Francisco. Many expand its offerings for families.
Such a large funding with a significant secondary component could alleviate some of the immediate pressure that Wealthsimple may feel in going public, giving the company a similar option: Clio F series last year. When asked how this round would impact Wealthsimple initial public offering (IPO) plansA company spokesperson said the fintech company's goal remains to go public someday, but said it had no update on a timeline.
The Series E marks Wealthsimple's second major funding in the last 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 the financing, while Power and IGM Financial sold portions of their shares in the deal. Last year Iconiq has reportedly increased its bid purchasing another $100 million worth of Wealthsimple shares from current and former employees of the company.
Prior to this round, Wealthsimple had raised $630 million in total seed capital to date. Wealthsimple declined to provide revenue or profitability figures, disclose secondary sellers of the shares or confirm whether the round would involve any changes to the company's board of directors.
Last week Wealthsimple made public a set of products and services designed to provide clients with more advanced investment options and tools at a lower cost. The FinTech company was also named as part of the Bank of Canada. first batch registered payment service providers.
Disclosure: Hannah Zaidi, Wealthsimple's Vice President of Payments Strategy and Chief Compliance Officer, serves as BetaKit Board of Directors.
Image courtesy of Wealthsimple.
