We started from the bottom now we’re here. Who’s we? Wealthsimple is the new kid on the fintech block kicking butt and taking names. If you haven’t heard of Wealthsimple, they’re only the biggest online investment and trading platform in the country. They’re on a mission to make “financial freedom a fundamental human right,” starting with Canadians. It all began with one clever Canadian boy. Then, add one super simple idea and a dash of that Silicon Valley magic fairy dust, and poof! A $5 billion dollar financial revolution is taking Canada by storm. But you need a little more than brains and bootstraps to earn that kind of street cred. Co-founder and CEO, Michael Katchen, has friends in high places. Who owns Wealthsimple? Let’s take a look at Wealthsimple’s origin story and the investors helping turn his dream into reality.
Wealthsimple: how it started
What do Ancestry.com and Wealthsimple have in common? Canadian wunderkind, Michael Katchen. Like many tech visionaries before him, Katchen began his journey in the heart of Silicon Valley. He worked for online-based company, 1000Memories; a site that allowed people to create a digital scrapbook of old family photos and memories they could use to build a family tree.
By 2012, 1000Memories was bought by Ancestry.com. In case you live off the grid, Ancestry.com is only the world’s largest genealogy company, no big deal. Shortly thereafter, Katchen’s co-workers started coming to him for investing advice. So he built a spreadsheet to teach them how to create their own investment portfolios without going through an expense advisor.
The spreadsheet was a hit. Such a hit, in fact, it inspired Katchen to build a company that made investing easy and accessible for everyday people. Wealth shouldn’t be scary, complicated, or reserved for the upper echelons of society. Wealth should be available to everyone, and it should be simple. In September 2014, Wealthsimple was born.
Katchen moved back to Toronto to turn that simple idea into something special. By 2015, he acquired Canadian ShareOwners Investments Inc, a discount trading brokerage. And he gained $400 million dollars of managed assets and 10,000 customers in the process. It wasn’t long before Wealthsimple caught the eye of heavy-weight management and holding company, the Power Corporation of Canada.
Power who? You might not have heard of the Power Corporation of Canada (POW). But maybe you’ve heard about the powerhouse family behind POW? Montreal’s own Desmarais family. In 1968, Paul Desmarais Sr. bought Power Corporation from founders Arthur J. Nesbitt and Peter A.T. Thomson. From there, Paul grew the company into a juggernaut, holding just shy of $630 billion dollars in assets. They currently own over 70% of Wealthsimple.
Before his passing in 2013, Paul Desmarais was the 4th richest person in Canada. His family has connections to Canada’s political elite. According to Forbes, his personal net worth tipped the scales at $5.81 billion dollars. But if you’ve never heard of Paul Demarais before, maybe you’ve heard of Wealthsimple’s other investors.
Ryan Reynolds and Canadian national treasure, Michael J. Fox, have joined the star-studded list of private investors. On May 3rd 2021, Katchen announced on Twitter that Wealthsimple had just raised one of the largest investments in Canadian history, a whopping $750 million dollars; closing the Tweet with “Oh, and did we mention @Drake chipped in?” Even Canada’s beloved rap prodigy has invested in Wealthsimple, pushing their valuation to an impressive $5 billion dollars.
Wealthsimple: how it’s going
From little acorns do mighty oaks grow. What began as informal investing advice from one co-worker to another has grown into Canada’s largest online investing and trading platform. They started with a singular mission; to make financial freedom a human right.
Wealthsimple has leveraged the golden age of technology to provide smart, simple and elegant financial tools available to everyone, “regardless of age, net worth, background or education.” It doesn’t matter if you have one dollar or one million of them, Wealthsimple has removed the complicated and overwhelming systemic barriers that previously stood between regular people and financial independence.
They started with their marquee product, Wealthsimple Invest. For the first time, anyone with any amount of money could invest in the stock market with just a few taps of a button. Wealthsimple Invest offers its clients low-cost index investment portfolios tailored to their goals and risk appetite. Their fuss-free process asks you a few simple questions, then automatically designs the perfect portfolio for you.
Do you even know what “index investing” is? It doesn’t matter. Wealthsimple has taken the stress-inducing process of investing your money into something you don’t fully understand and made it easy, elegant and empowering. Your portfolio is built with a robo-advisor, cutting-edge computer software that uses math and trend analysis to put “your money to work like the world’s smartest investors.” And they include real human advisors to make the most of your investment.
Sounds pretty amazing right? You’re not the only one who thinks so. Currently, Wealthsimple boasts over 1.5 million investors; everyday people like us. And they manage about 15 billion dollars of assets. That’s a lot of cheddar.
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