WealthSimple Attains Unicorn Status, Joining Rival FinTech Firms Revolut, and Robinhood

WealthSimple, the Canadian wealth management specialist, has recently become the latest FinTech firm to achieve ‘unicorn’ status.  This was done through a recent investment round, front-lined by Technology Crossover Ventures (TCV).

Unicorn Status

Unicorns are real – at least not in a traditional sense of the word.  In today’s world, a ‘unicorn’ is a term used to describe a company which has attained a valuation greater than $1 billion.

These companies are typically often involved in FinTech, and are often privately held start-ups.

Taking Part

As previously indicated, TCV has now helped WealthSimple along its way to achieving this status.  It was not alone, however, in contributing to this latest round of funding.  The following companies are those to have joined TCV in investing.

• Meritech capital ventures
• Greylock partners
• Allianz x
• Two sigma ventures
• TCV led the round

Cumulatively, this group of investors contributed a total of $114M CAD ($87M USD).  In doing so, WealthSimple now boasts a valuation of $1.4B CAD ($1.07B USD).

This valuation is an increase from the company’s last round, which saw $190M CAD ($145M USD), raised at a valuation of $743M CAD ($566M USD).

Talent Boost

This particular round was more about just raising funds.  In addition to the influx of capital, WealthSimple has announced that it will be adding TCV General Partner, David Yuan, on to its Board of Directors.

David Yuan spoke on this development, and why TCV chose to align itself with a company such as WealthSimple.

“We have been watching Wealthsimple's rise in the Canadian market and love the way the company is bringing simplicity, humanity, and delight to personal finance…TCV is focused on businesses that have the potential to transform industries, and we are thrilled to work with Mike and the Wealthsimple team to build a leader in financial services and an important consumer platform.”

Widespread Growth

In addition to growing in valuation, WealthSimple has broadly expanding its range of services offered throughout 2020.

Most recently, WealthSimple announced the launch of its newly minted service, dubbed ‘WealthSimple Crypto’.  This is a closed-loop service, which allows for its clients to trade, both, Bitcoin and Ethereum in a safe environment.

As a company founded on servicing technological-minded individuals, this was an unsurprising move.  Younger generations, which have grown up in an increasingly digital world are more comfortable with such technologies.  With millennials being a large portion of WealthSimple’s clientele, this was a logical expansion.

The focus on younger generations was also on display recently when WealthSimple CFO, Leen Li, transitioned into a new role, spearheading the ‘WealthSimple Foundation’ as its new CEO.  This endeavor aims to develop and provide access to financial services meant to help youth save for university/college.  At the time, Leen Li spoke on why the WealthSimple Foundation was important to her, stating,

“Only three of my siblings, myself included, were given the opportunity to attend college while the other two had to work after high school to provide income for the family…Access to post-secondary education has a lifelong impact, and it’s critical that we help every child in Canada to be afforded that same opportunity I was.”

A Blessing – Reinventing Wealth Management

By attaining the vaunted ‘unicorn’ status, WealthSimple now finds itself placed firmly alongside other FinTech firms, such as Revolut and Robinhood.

While each of these companies have approached FinTech, and their respective clientele, in a unique manner, they all have a common trait – reinventing the way we manage and access wealth.  In a recent contribution to our ongoing ‘thought leaders’ series, Daglar Cizmeci, CEO of Red Carpet Capital, took a look at this trend.

He states,

“The entire financial services industry has been shaken by the technological revolution, which in turn, has shaped the world. Wealth management in 2020 is no exception to this trend. Fintech has reinvented the landscape of investment management by incorporating Big Data, Artificial Intelligence and machine learning to optimise portfolios, mitigate risks and evaluate investment opportunities.”

WealthSimple

Founded in 2014, WealthSimple is a financial service provider, based in Toronto, Canada.  Since launch, WealthSimple has amassed a client-base totaling nearly 200,000, and manages $5 billion in assets.

CEO, Michael Katchen, currently oversees company operations.