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Robinhood raises $320M more, bringing its latest round to $600M at an $8.6B valuation
The stakes keep getting higher for American discount brokerage Robinhood, which today disclosed that it has added hundreds of millions of dollars to its previously disclosed funding round.
Including the $280 million that the company had already announced, Robinhood said that it was “pleased to share” that it “raised an additional $320 million in subsequent closings.” Its now $600 million funding round brings its post-money valuation to $8.6 billion. Fortune first reported the news.
(A detail, but the new capital is part of the same round as it was raised at the same price. TechCrunch reported when the company’s $280 million round was announced, the fintech company was worth $8.3 billion. Another $300 million in capital at a flat share price means that the company’s valuation should have risen by only the dollar amount added. As it did.)
Robinhood’s new capital was as unsurprising as its first tranche of this megaround; the former startup is seeing demand for its product surge as investors of all sizes take part in the year’s huge equity volatility. Many investing-and-savings-focused fintech companies are enjoying a huge year, as consumers look to hoard and employ their cash.
Robinhood has had a good business year, even if some of its practices have come under fire. The company pledged to tighten up parts of its platform relating to more exotic trading after the suicide of one of its users, for example; a topic that TechCrunch discussed at length last week.
What is inescapable is that Robinhood is having one hell of a year. When it might go public isn’t clear, especially as the private company is having no problem raising capital without an IPO. But as its value continues to rise, it becomes an increasingly remote acquisition target.
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Talking venture, B2B and thesis-driven investment with Work-Bench’s Jon Lehr
Earlier this week, the Equity crew caught up with Work-Bench investor Jon Lehr to get his take on the current market, and how his firm goes about making investment decisions.
The conversation was a treat, so we cut a piece of it off for everyone to listen to. The full audio and a loose transcript are also available after the jump.
What did Danny and Alex learn while talking to Lehr? A few things, including what Seed II-level investments need these days to be attractive (Hint: It’s not a raw ARR threshold), and what’s going on in SaaS today (deals slowing, but not for select founders; relationships are key to doing deals today), and why being a VC is actually work.
But what stood out the most was how Lehr thinks about finding investment opportunities. While some VCs like to cultivate images of being gut-investors, cutting checks based on first meetings and the like, Lehr told TechCrunch about how he researches the market to find pain-points, and then the startups that might solve those issues.
You can listen to that bit of the chat in the clip below:
Extra Crunch subscribers, the rest of the goodies are below. (A big thanks to Danny for cleaning up the written transcript.)
The audio
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European early-stage VC firm ‘Project A’ on Europe’s startup scene taking the next step
Project A, the Berlin-based VC, just raised a new $200 million fund (€180 million) to continue backing European startups at Seed and Series A stage.
In addition, the firm — whose investments include WorldRemit, Catawiki, Voi and Uberall — announced it will now have a presence in London and Stockholm in order to put people on the ground in what it says are “two of its favorite ecosystems.”
What better time, therefore, to catch up with the team at Project A, where we talked investment thesis, why Stockholm and London, and the increasing interest in Europe from U.S. LPs and VCs. Other subjects we touched on include diversity in venture, and, of course, Brexit!
TechCrunch: You last raised a fund in 2016, totaling €140 million, what changes have you noticed since then with regards to the types of companies you are seeing and the European ecosystem as a whole?
Uwe Horstmann: Entrepreneurs definitely matured a lot over the last few years. We see more and more of serial founders who combine drive with experience delivering great results. We also noticed an increase in more tech / product-centric and in B2B models.
This doesn’t come as a surprise as the market for consumer-oriented models started developing much earlier and is now reaching its limits after a few years. Many entrepreneurs gained experience in the Old Economy or have been consulting companies for a few years, learned about the struggle with products and processes first-hand and developed solutions specifically tailored to the industry’s needs.
We also notice a rise in professionalism in company setups and a higher ambition level in founding teams. This is probably also due to a more professional angel and micro fund scene that has developed in Europe.
TC: I note that you have U.S. LPs in the new fund, which I think is a first for Project A, and more broadly we are seeing a lot more interest from U.S. VCs in Europe these days. Why do you think that is, and how does this change the competitive landscape for deal-flow and the ambition of European founders?
Thies Sander: Having our first U.S. LPs on board makes us proud. LPs have noticed that European VC returns have really picked up during recent fund cohorts.
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IEX’s Katsuyama is no flash in the pan
When you watch a commercial for one of the major stock exchanges, you are welcomed into a world of fast-moving, slick images full of glistening buildings, lush crops and happy people. They are typically interspersed with shots of intrepid executives veering out over the horizon as if to say, “I’ve got a long-term vision, and the exchange where my stock is listed is a valuable partner in achieving my goals.” It’s all very reassuring and stylish. But there’s another side to the story.
I have been educated about the realities of today’s stock exchange universe through recent visits with Brad Katsuyama, co-founder and CEO of IEX (a.k.a. The Investors Exchange). If Katsuyama’s name rings a bell, and you don’t work on Wall Street, it’s likely because you remember him as the protagonist of Michael Lewis’s 2014 best-seller, Flash Boys: A Wall Street Revolt, which explored high-frequency trading (HFT) and made the case that the stock market was rigged, really badly.
Five years later, some of the worst practices Lewis highlighted are things of the past, and there are several attributes of the American equity markets that are widely admired around the world. In many ways, though, the realities of stock trading have gotten more unseemly, thanks to sophisticated trading technologies (e.g., microwave radio transmissions that can carry information at almost the speed of light), and pitched battles among the exchanges, investors and regulators over issues including the rebates stock exchanges pay to attract investors’ orders and the price of market data charged by the exchanges.
I don’t claim to be an expert on the inner workings of the stock market, but I do know this: Likening the life cycle of a trade to sausage-making is an insult to kielbasa. More than ever, trading is an arcane, highly technical and bewildering part of our broader economic infrastructure, which is just the way many industry participants like it: Nothing to see here, folks.
Meanwhile, Katsuyama, company president Ronan Ryan and the IEX team have turned IEX into the eighth largest stock exchange company, globally, by notional value traded, and have transformed the concept of a “speed bump” into a mainstream exchange feature.
Brad Katsuyama. Image by Joshua Blackburn via IEX Trading
Despite these and other accomplishments, IEX finds itself in the middle of a vicious battle with powerful incumbents that seem increasingly emboldened to use their muscle in Washington, D.C. What’s more, new entrants, such as The Long-Term Stock Exchange and Members Exchange, are gearing up to enter the fray in US equities, while global exchanges such as the Hong Kong Stock Exchange seek to bulk up by making audacious moves like attempting to acquire the venerable London Stock Exchange.
But when you sell such distinct advantages to one group that really can only benefit from that, it leads to the question of why anyone would want to trade on that market. It’s like walking into a playing field where you know that the deck is stacked against you.
As my discussion with Katsuyama reveals, IEX may have taken some punches in carving out a position for itself in this high-stakes war characterized by cutting-edge technology and size. However, the IEX team remains girded for battle and confident that it can continue to make headway in offering a fair and transparent option for market participants over the long term.
Gregg Schoenberg: Given Flash Boys and the attention it generated for you on Main Street, I’d like to establish something upfront. Does IEX exist for the asset manager, the individual, or both?
Brad Katsuyama: We exist primarily for the asset manager, and helping them helps the individual. We’re one step removed from the individual, and part of that is due to regulation. Only brokers can connect to exchanges, and the asset manager connects to the broker.
Schoenberg: To put a finer point on it, you believe in fairness and being the good guy. But you are not Robinhood. You are a capitalist.
Katsuyama: Yes, but we want to make money fairly. Actually, we thought initially about starting the business as a nonprofit, But once we laid out all the people we would need to convince to work for us, we realized it would’ve been hard for us to attract the skill sets needed as a nonprofit.
Schoenberg: Do you believe that the US equity market today primarily serves investors or traders?
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An insider’s look into venture with Andreessen Horowitz’s Scott Kupor
After a decade in the peculiar world of venture capital, Andreessen Horowitz managing director Scott Kupor has seen it all when it comes to the dos and don’ts for dealing with Valley VCs and company building. In his new book Secrets of Sand Hill Road (available on June 3), Scott offers up an updated guide on what VCs actually do, how they think and how founders should engage with them.
TechCrunch’s Silicon Valley editor Connie Loizos will be sitting down with Scott for an exclusive conversation on Tuesday, June 4 at 11:00 am PT. Scott, Connie and Extra Crunch members will be digging into the key takeaways from Scott’s book, his experience in the Valley and the opportunities that excite him most today.
Tune in to join the conversation and for the opportunity to ask Scott and Connie any and all things venture.
To listen to this and all future conference calls, become a member of Extra Crunch. Learn more and try it for free.
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TradingView acquires TradeIt to add instant trading APIs to its investor toolkit
After raising $37 million to bring its on-the-spot stock market analytics tools to a wider range of publishers and other internet partners, TradingView today has announced its first acquisition to supercharge the services that it offers to investors, wherever they happen to be online. The startup has acquired TradeIt, which has built an API for on-the-spot trading on any site that uses it.
The terms of deal were not disclosed, but we understand from sources close to the deal that it was under $20 million, more specifically in the “high teens.” TradeIt, which used to be called Trading Ticket, had raised about $12 million from investors that included Peter Thiel’s mostly-fintech fund Valar Ventures, Citi Ventures and others. TradingView had raised just over $40 million with investors including Insight Partners, TechStars and others.
The deal is a big move for consolidation: together the two say they will serve more than 10 million monthly active users in 150 countries, covering some $70 billion in linked assets. But also, better economies of scale, and better margins for companies that provide services that touch consumers not necessarily from a “home” of their own.
The latter is a growing trend that has mirrored the rise of social media and other services that aggregate content from multiple sources; and also the bigger trend of instant, on-demand everything, where consumers are happier with the convenience of buying or engaging with something right when they want to, rather than shopping around, delaying or navigating to another place to do it.
That has also seen the rise of commerce APIs to buy things instantly, not to mention the emergence of a wide range of commerce applications that let people easily buy goods and services on the spot. (And in line with that, TradingView says that nearly half of its user base today is millennials, with an additional 13 percent even younger, Gen Z. “The groups are particularly drawn to [our] extensive charting expertise,” the company says.)
In fintech, and in the world of investing specifically, that’s a trend that has also helped the growth of cryptocurrency, which has opened up the world of investing and thinking about investing to a whole new class of consumers who — for better or worse — are hearing about investing opportunities via viral social media campaigns and other new kinds of channels. Whether cryptocurrency speculation bears out longer term, it is depositing a new class of people into the world of thinking about companies and investing in them.
That taps into the sweet spot where TradeIt and TradingView are building their business.
“TradeIt’s secure and compliant relationships with established U.S. retail brokerages, coupled with their robust integrations with top investing apps, allows TradingView to be part of the backbone of the investing ecosystem,” said Denis Globa, TradingView founder and CEO, in a statement.
TradingView’s partners today include Crunchbase, Investopedia, SeekingAlpha, Zacks, Binance, CME Group and Entrepreneur, where users are able to access a premium tier of TradingView tools by way of a subscription in order to do some instant data and price modelling of a company that they might be reading about. The thinking is that now they will also be able to go one step further by trading stocks related to that information. TradingView, meanwhile, can use that extra feature to make a little more money and sell its service to partners as more sticky, to the tune of 80 percent more time spent with publishers as a result of integrating TradingView’s tools.
That’s something that the two companies can already attest to doing well in partnership.
“TradingView’s vision aligns strongly with our view of the distributed financial networks of the future,” said Nathan Richardson, TradeIt CEO, in a statement. “We’ve worked with TradingView for several years now, and always felt our complementary products and shared retail investing users makes us stronger together.”
Richardson and his cofounder Betsy Eisenberg — who are both joining TradingView — had together built Yahoo Finance — so they are already well experienced in how to leverage the potential of bringing together content with utility.
“Nathan Richardson and Betsy Eisenberg are fintech pioneers who led the development of Yahoo! Finance from scratch. With them on board, we’re extremely excited about the growth potential,” Globa said.
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Investing app Stash raises $65M, launches banking and ‘stock-back’ rewards with Green Dot
Stash, the fintech startup and app that aims to introduce new people to the world of investing, is unveiling some interesting new services while also announcing that it has raised more funding to expand its business. The company is introducing mobile-based banking accounts from Green Dot Bank, and, alongside it, a new rewards program called “Stock-Back.” When users spend money using their Stash accounts, they get “points” — which are either stocks in the companies where they are buying goods, or shares in ETFs approved by Stash. On top of that, Stash also said it raised a Series E of $65 million that it will be using to grow its business on the back of these two launches.
A spokesperson for the company said that Stash is not disclosing the full round of investors in this round. For context, Stash was valued at $350 million post-money in its Series D, according to figures from PitchBook, and a source says the valuation is now “much higher” than $400 million.
But from the looks of it, the $65 million appears to include participation from Breyer Capital, a previous investor whose founder Jim Breyer has heartily endorsed the new Stock-Back service and accompanying loyalty program that’s tied in with it, which was tested early with companies like Netflix, T-Mobile and Chipotle all offering stock when people used their Stash accounts to pay for goods and services at the companies.
“I have invested in and served on the Board of many leading companies, and it’s clear how a program like Stock-Back can power immense brand loyalty,” he said in a statement today. “The early data shows unequivocally that share ownership drives increased sales and customer appreciation. This innovative new technology from STASH will have CEOs and CMOs knocking on their door.”
From what we understand, the round was led by a private institutional investor and includes 40 percent existing and 60 percent new investors. Previous backers in addition to Breyer include Union Square Ventures, Coatue Management, Entree, Goodwater and Valar. “We’re really excited and proud to be working with this incredible group of VCs,” the spokesperson noted.
The Green Dot-powered banking service comes with the core features that will sound familiar to those who have used or looked at next-generation banking services before. It will include a debit card-based account, no overdraft or monthly maintenance fees, access to a network of ATMs that can be used for free and direct deposit services, as well as “personal guidance” for their financial planning activities, from saving to investing.
Stash is part of a wave of fintech startups — others include the likes of Robinhood, Acorns, YieldStreet, Revolut and many others — that have tapped into the popularity of apps and the advent of new financial services technology to democratise how individuals can save, spend, invest, borrow and lend money, moving many of those operations and transactions out of the hands of the big incumbent players who used to control them.
The average age of a Stash user is 29 and average income is less than $50,000 per year, and tying in transactions made using Stash’s banking service — by way of reward points that are being picked up incidentally — will make it even more seamless for these users to take some of their money and invest with it, while at the same time demystifying some of the process and making it more likely that those users will choose to invest even more down the line.
The idea of tying investments to what you are actually purchasing is a clever one. For a startup whose user base includes no-nonsense professionals from fields like teaching, nursing and retail, this is the embodiment of putting your money where your mouth is — literally speaking, as the investments can include things like shares in Chipotle each time you buy food there, and T-Mobile every time you pay your phone bill for all the talking you do.
Stash is positioning Stock-Back as a rewards program, with the percentages varying by business or brand and going as high as five percent in Stock-Back in some cases — as is the case, at launch, when people use their Stash debit cards to pay their Spotify and Netflix dues.
Ultimately, the aim of this is to present a way for ordinary, modestly-salaried people not only to potentially make money, but to be better engaged in how financial systems work, and how their daily actions impact that — the idea being that this knowledge can only help them in the long run.
“80% of Americans are living paycheck-to-paycheck. Stock-Back is our way of utilizing STASH’s smart, patent-pending technology to help people build better financial habits and invest in their future,” said co-founder and president, Ed Robinson, in a statement. “Our ability to give customers the opportunity to save and build portfolios that mirror their spending behavior and preferences is incredibly powerful.”
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YieldStreet raises $62M to democratise alternative investments in shipping, real estate and more
There has been a wave of fintech startups emerging that make different kinds of investing more accessible to a wider pool of people, and today one of them has raised a substantial round of money to help fill out its mission.
YieldStreet — which provides a platform for making alternative investments in areas like real estate, marine/shipping, legal finance, commercial loans and other opportunities that in the past were only open to institutional investors — is today announcing that it has raised $62 million in a Series B round of funding.
Co-founder and CEO Milind Mehere said in an interview that the money will be used to build a fundamental expansion of the platform so that any interested party can invest.
With a view to improving everyone’s financial lot in life, the name of the game is capitalism, and more specifically democratising the opportunity to invest, making it possible for more people beyond the often-cloistered and clubby environment of the investment world.
“In order for consumers to move to financial security and financial independence, they should be given access to the same products institutions have,” said Mehere. “This is about creating the most wealth out of people’s money, irrespective of their net worth.”
The round was led by Edison Partners, with participation from Greenspring Associates, Raine Ventures and a large multi-billion-dollar NY family office. YieldStreet’s valuation is not being disclosed with this round. Prior to this, the company raised around $116 million, with $100 million of that in debt, according to PitchBook.
To date, YieldStreet has seen more than $600 million invested on its platform from more than 100,000 members, with an expected 12 percent IRR and more than $300 million in principal and interest payments made to its investors. Up to now a person had to be an accredited investor to benefit from this. That was already a progression on those investments being restricted only to institutions, but it is still a relatively small pool of users. In the U.S., where YieldStreet operates, being an accredited investor has a specific set of criteria that includes individuals having a net worth of at least $1 million and income of $200,000 or more.
The plan is now to use the funding to expand the funnel by creating new vehicles for investing that will not require people to be accredited to get involved. This will build on groundwork the company has already laid with YieldStreet Wallet, a savings account that provides 2.2 percent interest, which is open to everyone.
The idea will be to offer non-accredited investors investment vehicles, created by YieldStreet, where they will be able to access multiple products, Mehere said. “We are working through the legal and regulatory aspects now.” He added that the company is also looking at ways of tapping into retirement and IRA accounts for these users as well.
The Jobs Act in the U.S., and the wider growth of people shifting all of their financial services online, has created a landscape of startups that are liberalising how capital moves. Many of these are specifically freeing up the arcane and rarified world of investment. They include companies like Robinhood, which has built a platform for trading public stocks. In the area of private investment — that is, investing in businesses and opportunities that are not publicly traded — we have seen PeerStreet, which is offers a service similar to YieldStreet but focusing on real estate. In the U.K., you also have startups like LendInvest, which lets property buyers bypass traditional mortgages by letting others put up the funding for those purchases.
“The ability for individual, accredited and non-accredited, investors to access products that previously were only available to institutional investors is a key part of fintech’s promise to leverage technology to create access and reduce fees on these types of investments. In addition, lower fees can be passed on to investors to allow them to achieve a higher return,” said Chris Sugden, managing partner, Edison Partners, in an email. (Sugden will also be joining the startup’s board with this investment.)
What’s interesting is that the sheer number of fintech startups, even if you only focus in on those centered around investing, will inevitably lead to some M&A down the line, and that is an area that YieldStreet will also be exploring ahead.
“We do see consolidation or another theme we call, ‘rebundling’ as well,” said Sugden. “Over the next few years we will hear more about the convergence of service offerings under a single platform. In my opinion, retail investors would like to get all of their financial services in a single, mobile application. Thus a key driver of consolidation will be the ability for sites such as YieldStreet, that are set up initially as a single product, to build or acquire new offerings. Whether these new offerings are by investment type, asset class, geography or structure all are critical to attracting investors at scale.”
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Micro-investing app Stash raises $25 million Series B
Stash, a mobile application that aims to make investing easier for those who aren’t as financially experienced, has raised $25 million in Series B funding, the company announced today. The round, which follows the startup’s $9.25 million Series A just this August, was led by prior investor Valar Ventures, with participation from Breyer Capital, Goodwater Capital, and Entrée… Read More
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Albert raises $2.5 million for its finance app that helps you save money
Everyone knows the basics of how to improve their financial health: put money into savings, track your spending, reduce your debt, look for ways to save on your monthly bills, and make smart investments. Where people struggle is translating that knowledge into specific actions you can take today. That’s where an application called Albert steps into help. The startup, which has now closed… Read More
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