Roboadviser Wealthsimple, which was valued at $4 billion last year, is laying off 159 people, or about 13% of its staff. The Toronto-based company has been a leader in democratizing financial products for consumers, including stock trading, crypto asset sales, and peer-to-peer money transfers. And now it appears that Wealthsimple is an example of another company that boomed during the early days of the pandemic and is now experiencing a downturn in business. CEO and co-founder Michael Katchen addressed the move in a letter to employees, which was published as a blog post, noting that Wealthsimple’s clients “are experiencing a period of uncertainty in the market that they have never experienced before.” In the letter, he wrote:
If you’ve been with us for the past two years, you know it’s been a time of immense volatility. Almost everyone who made predictions about how the pandemic would affect the economy was wrong about one thing or another. The markets collapsed. Then they shot. Our business grew at an unprecedented rate, and since then we have been aggressively building to meet the needs of a wave of new customers. Of course, volatility works both ways, and we are now seeing the other side as pandemic market conditions ease. He added that the market change will result in the startup focusing more on core businesses such as investment and banking, as well as cryptocurrencies. You’ll reduce your efforts in areas like peer-to-peer payments, taxes, and business services.
Wealthsimple’s latest raise was a $610 million round led by Meritech and Greylock. At the time, the company said it had more than 1.5 million users and more than $10 billion in assets under management based on the latest publicly available figures. It has grossed around $900 million over its lifetime, according to Crunchbase. Before today’s layoff, it had 1,262 employees.