Wealthsimple aims to quadruple assets to $100 billion in 5 years

financialpost.com:

Wealthsimple Financial Corp., the online investment platform backed by Canada’s billionaire Desmarais family, has set a target of quadrupling assets to $100 billion in five years, betting that it can capture a significant share of younger investors who don’t want to use traditional money managers.

Toronto-based Wealthsimple has grown rapidly, with assets rising about 10-fold to $25 billion since 2018, thanks in part to slick advertising and some Hollywood star power — celebrities Drake, Michael J. Fox and Ryan Reynolds are among its minority investors. The business has gained momentum recently, Wealthsimple chief executive Michael Katchen said Dec. 5.

“We’re adding about $1 billion of net deposits a month right now,” Katchen told analysts at IGM Financial Inc.’s investor conference Tuesday.

IGM, which is controlled by the Desmarais’ Power Corp. of Canada, is the largest shareholder in Wealthsimple with a 24 per cent interest. Other parts of the Desmarais empire also own stakes, as do venture firms such as TCMI Inc., better known as TCV, and Greylock Partners.

For the Desmarais clan, it’s one of many financial-technology bets that they hope can juice growth in a company dominated by established, slow-growing insurance and investment businesses. The bulk of Power Corp.’s net asset value stems from its large ownership stakes in IGM, a seller of mutual funds and financial advisory services in Canada, and Great-West Lifeco Inc.

Wealthsimple is targeting millennials who want to invest on their own or take straightforward investment advice through digital channels, sometimes called robo-advice. The company’s valuation briefly rose above $5 billion in 2021, but the crash in fintech valuations caused it to fall to about $2