(Toronto) As Wealthsimple celebrates its tenth anniversary, the financial platform is revealing for the first time that it is profitable, as its revenue and assets have increased.
The company that started as a robo-advisor has gradually added investment capabilities over the years, as well as more bank-like features, in an attempt to attract clients away from established players.
Wealthsimple’s suite of offerings, which includes everything from commission-free trading to mortgages, has helped it amass more than $50 billion in assets, about double what it had a year earlier.
“We benefit from it as a company because it equates to a more diversified and resilient revenue set, a deeper relationship with our customers,” CEO Michael Katchen said in an interview.
The privately held company, in which Power Corporation and related entities hold a majority stake, said its second-quarter revenue of $129 million was up 88 per cent from a year ago and it has more than three million customers.
Even before the revenue increase, the company had said it had been profitable since the second quarter of last year.
Wealthsimple has faced skepticism about the ability of its low-fee model to generate profits, a concern that is unfounded, Katchen says.
The company’s valuation is down from its peak. Power Corporation, which held 55.1% of the non-diluted stake as of June 30, said the fair value of its stake was $1.5 billion. That’s down from $2.1 billion in 2021.