Online investment management firm Wealthsimple announced this morning that it has agreed to a $750.0 million financing round at a $5.0 billion valuation. This funding round was led by venture capitalists Meritech Capital Partners and Greylock Partners, and participated by a host of celebrities including Drake, Michael J. Fox, and Ryan Reynolds.
The fundraising consists of a $250.0 million primary offering by Wealthsimple, and a $500 million secondary offering by a consortium of Power Corporation of Canada (TSX: POW), IGM Financial Inc., and Great-West Lifeco Inc.
Following these offerings, this group will now have a combined 43% equity interest and 60% of the voting rights – a drop from holding a 62% equity interest and 76% of the voting rights prior to this funding. As a result of the secondary offering, however, this group will receive proceeds of $500 million and puts the remaining valuation of its investment in Wealthsimple at $2.1 billion.
Wealthsimple’s last financing round was in October 2020 which saw $114.0 million funded at a $1.5 billion valuation.
Following this latest funding, Meritech Capital Partners will appoint Max Motschwiller to the Wealthsimple board of directors.
The transaction is expected to close mid-May 2021, subject to customary closing conditions.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.