These 3 Companies Are About to Go Supernova
October 1, 2017
LUC RINALDI, TORONTO LIFE (SEPT 18, 2017)
The city’s hottest start-ups
1. WEALTHSIMPLE
The CEO: Michael Katchen
Total Investment: $100 million
A few years ago, Michael Katchen got tired of dishing out investing advice to his friends. So he created Wealthsimple, an app that would do the job for him. The robo-adviser puts investing on autopilot, letting financially illiterate customers grow their savings without having to watch the markets. Three years later, Wealthsimple has more than 30,000 users. When the company doubled its assets to $1 billion in the spring, Justin Trudeau swung by for a photo op, referring to the place as “an example of fintech innovation at its finest.” Investors are impressed, too. Power Financial’s Paul Desmarais III, a Canadian start-up kingmaker, has funnelled $100 million into Wealthsimple. His contribution has helped the company launch in the U.S. and the U.K., giving them access to 10 times the customers they have at home.
2. HUBBA
The CEO: Ben Zifkin
Total Investment: 59.1 million
In the mid-2000s, when Ben Zifkin was running the management consulting firm Axsium Group, he pretended his business was based in the U.S.—back then, American clients and investors didn’t pay attention to Canadian companies. Now, he’s one of the people responsible for putting Toronto on their radar. His main gig is running Hubba, a 60,000-client platform that lets brands get their products in the hands of independent retailers and big-boxes like Walmart. In late 2016, Goldman Sachs invested in the platform, putting it in the hallowed company of Uber, Facebook, Pinterest and Spotify. This summer, Hubba took over the lease for a 40,000-square-foot office on Spadina. While the business grows into its new space, the office will become a mini–tech mecca: Zifkin is filling the spare floors with a cadre of buzzy start-ups that he’s personally hand-picked, such as Ladies Learning Code.
Hubba’s office in a former garment warehouse near Spadina and Adelaide. Photograph by Catherine Farquharson.
3. LEAGUE
The CEO: Michael Serbinis
Total Investment: $30 million
Stone-age paperwork and red tape are enough to scare most tech-minded entrepreneurs away from health insurance. Not Michael Serbinis, one of Toronto’s most successful innovators. After he sold his ebook company, Kobo, for $315 million in 2012, he founded League, a platform that simplifies benefits and insurance—clients include UHN, Etsy, Starbucks and Entertainment One. Members load the app on their smartphones and swipe through a sleek marketplace of benefits providers, where they can book appointments and pay for them with a digital wallet. Last year, League raised $25 million from OMERS and even secured funding from a handful of competitors: RBC, Manulife and Power Corp. The company recently opened offices in Seattle and Chicago, expanding its operations in the U.S., where premiums are thousands of dollars higher than in Canada—and where League, which takes a small cut of each transaction, stands to strike gold.
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