Understanding the markets this week: May 10, 2021

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    Wealthsimple bets on celebrities and has a valuation of 5 billion US dollars

    In October 2020 we reported on a previous round of financing for Wealthsimple. At the time, valuation estimates for the Canadian online investment company were in the range of $ 1 billion.

    The actual valuation was closer to $ 1.5 billion.

    Fast forward to this week: Wealthsimple announced another round of financing that brings the price to $ 5 billion. Celebrities are also there, with musician Drake, actors Ryan Reynolds and Michael J. Fox, and some high-profile professional athletes stepping forward with cash to invest in the fintech giant.

    Wealthsimple was originally created as one of Canada’s robo-advisorand has added other financial services including a Discount brokerage. Many say they “own” the millennial market in Canada. That offers incredible long-term potential and attractiveness for investors.

    It certainly does not rise based on profits that have not yet arrived – and may be many, many years away.

    In this week’s fundraising round, led by venture capitalists Meritech and Greylock and which also includes Inovia, Sagard and Redpoint, Two Sigma Ventures, TCV, and the aforementioned celebrities and athletes, Wealthsimple raised $ 750 million.

    The company saw significant growth during the pandemic, which is likely a big reason why its valuation has soared.

    Wealthsimple’s commission-free retail platform has grown rapidly, and so have customers invest in bitcoin via their crypto trading platform. At the end of last year, Wealthsimple also launched its money transfer app Wealthsimple Cash and made it available to all Canadians in March 2021.

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