CPP Investments, IGM and Power Corp. back the fintech again as assets reach $169.2 billion
Wealthsimple Inc. has agreed to an equity round of up to $425 million at a $13.8 billion valuation.
The round includes a $300 million primary offering and a secondary offering of up to $125 million. GIC, the Singapore sovereign wealth fund, is leading it. Existing investors Power Corporation of Canada, IGM Financial Inc., ICONIQ, CPP Investments and Inovia are also participating.
The valuation is 38% above the $10 billion set in last year’s round, according to Jefferies analyst John Aiken.
Proceeds target products and technology
Wealthsimple says the $300 million primary portion will fund product expansion and technology infrastructure. The company also plans to grow personal banking, trading and investment products.
The company says it launched more than 50 products over the past year across investing, spending, chequing and business. As of Sept. 30, it held $169.2 billion in assets under administration, up from $100 billion a year earlier. More than four million Canadians and 30,000 businesses use the platform.
Wealthsimple launched in 2014 as a robo-adviser. During the last quarter, Wealthsimple said new chequing accounts outpaced new investing accounts for the first time.
Part of the round is a secondary offering, in which investors buy shares from employees. The company says it lets staff “share in the value they’ve helped create.”
CEO and co-founder Michael Katchen said the investors “know our business deeply and chose to increase their commitment,” in the news release.
Vinay Yarlagadda, managing director of GIC’s Technology Investment Group, said in a statement: “Since co-leading last year’s round, our conviction in Wealthsimple’s ability to become Canada’s leading financial services platform has only grown.”
IGM’s stake and CPP Investments’ role
IGM Financial, a member of the Power Corporation group, released its own figures Tuesday evening. It will raise the fair value of its Wealthsimple investment by $341 million, or 13%, to $2.93 billion from $2.59 billion. The increase is worth $1.49 per IGM share, the company said.
IGM will invest an additional $96 million in Wealthsimple. After closing, IGM will hold a 25.1% interest valued at $3.03 billion, including the new investment. It will remain Wealthsimple’s single largest shareholder.
“Our additional investment reflects our confidence in the business, its leadership and its long-term growth potential,” said IGM president and CEO Damon Murchison.
The deal fits IGM’s strategy of investing in wealth and asset management businesses with strong growth potential, the company said. Its other strategic holdings include Rockefeller Capital Management, China Asset Management Co., Ltd. and Northleaf Capital Partners. IGM has about $346 billion in assets under management and advisement as of Sept. 30.
The transaction is subject to customary closing conditions. IGM expects it to close in the fourth quarter of 2026.
CPP Investments, which invests Canada Pension Plan assets, first joined Wealthsimple’s investors last year, as Benefits and Pensions Monitor reported. At the time, it said the investment fit its strategy of backing technology-driven businesses that deliver lasting value for CPP contributors and beneficiaries.
The new valuation equals about 8% of assets under administration, based on the figures above. An RBC analyst noted last year’s valuation was 10% of assets, The Logic reported.
For plan sponsors and pension investors, the round offers a benchmark for how large institutions value private fintech platforms.
Aiken said the financing “illustrates both confidence in the outlook for its strategy and outlook but also the need to fund its growth.”
