Robo-adviser Wealthsimple adds Allianz as sharehoIder

(Bloomberg) -- Wealthsimple, the Canadian robo adviser company controlled by Power Financial Corp., is gaining another behemoth shareholder as it slowly gears up for an initial public offering.

Allianz X, the tech investment fund of Munich-based insurer and asset manager Allianz SE, owns about 10 percent of Wealthsimple after leading a financing round of C$100 million ($74.7 million) for the fintech start-up. Allianz will also appoint a board member, the companies said Wednesday in a statement. Power, which injected fresh cash directly and through IGM Financial Inc., retains about 65 percent.

“We’re now backed by companies that represent trillions of assets globally,” Wealthsimple Chief Executive Officer Mike Katchen said in the statement. He called Allianz’s investment “a major endorsement of our company and growth trajectory.”

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An online investment service company with low fees that tends to attract younger customers, Wealthsimple manages more than C$4.5 billion for clients in Canada, the U.K. and the U.S. It now also offers services to traditional financial advisers and will spend some of its new funding on that platform, as well as exploring new products, it said.

The Toronto-based firm plans to go public through an IPO within five years, Katchen has said.

Power, including through its in-house venture capital fund Portag3, had previously invested C$165 million in Wealthsimple. It’s been using its foray into fintech as a way to force its own companies, such as Great-West Lifeco Inc. and IGM, to improve their digital services.

"We believe the coming together of large incumbent companies that understand how to build global asset managers, with innovative, digital-first companies, is the future of financial services” said Paul Desmarais III, who oversees the fintech strategy for Power and is Wealthsimple’s chairman.