Power Financial Corp has invested $50 million (US$37 million) in “robo-adviser” Wealthsimple, bringing its total investment in the two-year-old financial technology company to $100 million, they said on Thursday.
Toronto-based Wealthsimple provides automated investment advice to consumers and helps manage personalized portfolios based on responses to an online questionnaire about investment goals. It entered the U.S. market at the end of January.
The robo-advice business was pioneered by fintech startups that, like Wealthsimple, have touted themselves as low-cost, easy-to-use alternatives to traditional investment firms. Competition has heated up as large established companies, including Charles Schwab and Vanguard, have followed them into this area.
Targeting young, first-time investors, Wealthsimple has marketed its service with its “money diary” profiles of celebrities.
The company said it now has more than 30,000 clients in Canada and the United States, up from 20,000 in late January, investing more than $1 billion in exchange-traded funds.
Power Financial, a Canadian holding company whose subsidiaries include Great-West Life and other insurers, has invested more than $250 million in financial startups. Last fall, it capitalized Portag3 Ventures, which invests in the fintech sector.
Update: In a statement, Wealthsimple, which is led by Founder and CEO Michael Katchen, said it will use the funds raised to continue its North American expansion and grow Wealthsimple for Advisors, its B2B platform.
(Reporting by Solarina Ho in Toronto; Editing by Jim Finkle and Lisa Von Ahn)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)
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