Canadian fintech giant Wealthsimple, which was valued at $4 billion as of last year, is laying off 159 people — or about 13% of its staff.
The Toronto-based company has been a leader in the realm of 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 experienced a boom during the early days of the pandemic and is now seeing a slowdown 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 living through a period of market uncertainty they’ve never experienced before.”
In the missive, he wrote:
If you’ve been with us over the past two years, you know it’s been a time of immense volatility. Just about anyone who made predictions about how the pandemic would affect the economy was wrong about one thing or another. The markets crashed. Then they soared. Our business grew at an unprecedented rate, and we have been aggressively building to meet the needs of a wave of new clients since then.
Of course volatility works both ways, and we’re seeing the other side of it now as the pandemic market conditions unwind.
He added that the market shift will result in the startup focusing more on core businesses such as investing and banking, as well as crypto. It will scale back its efforts in areas such as peer-to-peer payments, tax and merchant services.
The move came a week after Wealthsimple enacted a hiring freeze, according to BetaKit.
Wealthsimple’s last raise was a $610 million round led by Meritech and Greylock. At the time, the company said it had over 1.5 million users and had over $10 billion in assets under management as of the last publicly available numbers. It has raised about $900 million over its lifetime, according to Crunchbase. Prior to today’s layoff, it had 1,262 employees.