Having been investing since he was 12 years old, Michael Katchen was the guy his friends turned to for advice on what to do with their money.
Now, after working out of the valley at Y Combinator and selling his first startup to Ancestry.com, Katchen’s new business is all about turning that advice for his friends into one of Canada’s most significant startups of the year.
Wealthsimple, makes investing simple, low cost and accessible by instantly creating a diversified portfolio for clients and allows for automated maintenance.
That advice started out as a simple excel spread sheet on how to build a portfolio of ETFs. The document circulated among his group of friends and the general feedback was that they loved the system but hated the work associated with managing their investments.
“I came across many young people that knew they should be investing but didn’t really like what was available. At the time, investors in Canada had just two options to manage their money: Do it yourself or hire an advisor. They didn’t want to personally manage their money or hire an investment advisor that they didn’t necessarily trust. I knew there was an opportunity to build something that could invest your money in a very simple, transparent way,” said Katchen, founder and CEO.
Since building the platform in early 2014 and officially launching in September 2014, Wealthsimple has witnessed several notable victories.
From raising one of the largest series A funding rounds in Canadian history, announcing $400 million in assets with over 10,000 clients in less than a year, acquiring a brokerage, and the launch of mobile app in Canada, Wealthsimple has quickly become Canada’s largest online investment manager.
Opening an investment account is very intimidating, says Katchen, Canadians pay the highest investment management fee in the developed world, which can hinder people from starting.
That’s why the business model is to keep investment fees at a reasonable cost and to build tools and services to simplify the lives of clients.
“We’re making a difference in the day-to-day lives of thousands of Canadians and the scale of that impact gives us the chance to be nominated for startup of the year,” said Katchen.