What started in 2014 as a simple robot trade advisor is now an all-time Canadian business success story.
What happened: Wealthsimple raised $750 million, giving the financial services company a $10 billion market cap and putting it at the front of the private Canadian tech firm pack. The raise was led by U.S. VC Dragoneer Investment Group and Singapore’s sovereign wealth fund. Another big investor was the Canada Pension Plan (CPP) Investment Board.
- Canadian holding company Power Corporation continues to hold a majority stake in Wealthsimple after it and its subsidiary IGM Financial contributed $100 million each.
Why it matters: Ottawa has made noise about how it wants Canadian pension plans to invest more domestically. The question is where these pension dollars will go to generate adequate returns. CPP’s Wealthsimple plunge marks one potential answer to the query.
- Canada has a wellspring of promising private tech firms with US$100 million or more in revenue, which could prove to be investment targets that will pay off with IPOs.
- Of the several nine-figure Canadian tech firm raises this year, pension funds have been involved in deals with B2B AI firm Cohere and marketing platform StackAdapt.
Zoom out: As for Wealthsimple, the raise comes a week after it announced it had over $100 billion in assets under administration, reaching the target three years ahead of sched. The cash will help it expand its offerings, pursue acquisitions, and, eventually, go public.—QH