Brokerage Wealthsimple raises money at US$4b value; Drake buys in

[TORONTO] Power Corp of Canada's Wealthsimple online brokerage raised C$750 million (S$812.1 million) in a funding round that valued it about US$4 billion, more than triple what it was worth in October.

The round was led by existing investors Meritech Capital Partners and Greylock Partners, the Toronto-based company said Monday. Also participating are Canadian celebrities including rapper Drake, actors Ryan Reynolds and Michael J Fox and basketball player Kelly Olynyk.

Wealthsimple, which has more than two million users, is benefitting from surging valuations for tech companies and an increase in online trading that has fuelled rivals like Robinhood Markets. Wealthsimple offers commission-free stock trading as well as automated investing, cryptocurrency trading and tax services.

Chief executive officer Michael Katchen said last year the company is building out cash, checking, insurance and mortgage products to try to become users' primary financial institution.

The financing announcement confirmed a Bloomberg report on April 30 that the company was in talks to raise money at a valuation of at least C$4.3 billion. Wealthsimple raised C$114 million at a C$1.5 billion post-money valuation in October, giving it unicorn status.

The latest funding round consisted of a C$250 million primary offering by Wealthsimple and a C$500 million secondary offering by Power Corp and its subsidiaries. Power Corp, the Canadian financial conglomerate controlled by the Desmarais family, will hold 43 per cent of Wealthsimple after the financing, including the portions owned by Power-controlled IGM Financial and Great-West Lifeco.

Power Corp shares climbed 1.7 per cent to C$36.39 at 9.40am in Toronto, while IGM advanced 2.8 per cent to C$45.09 and Great-West rose 0.5 per cent to C$35.83.

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