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Robinhood’s pain is Public’s gain as VCs rush to give it more money

February 12, 2021

2 minute read

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Public.com, a social-focused free inventory buying and selling service, is nearing the shut of a Sequence D simply two months after elevating a $65 million Series C, sources aware of the matter instructed TechCrunch.

The San Francisco-based fintech goals to offer individuals the flexibility to put money into corporations utilizing any sum of money, with a give attention to group exercise over energetic buying and selling. It competes with Robinhood, M1 Finance and different American fintech corporations that provide customers a strategy to invest in equities with low or zero fees.

Public.com apparently received a flurry of investor curiosity over the previous couple of weeks after Robinhood discovered itself in scorching water and primarily raised $3.4 billion in a matter of days to assist get itself out of a large number.

That new capital got here at a difficult time for the unicorn, which could pursue an IPO this year. And some traders reportedly need a piece of rival Public.com’s pie.

One supply instructed TechCrunch that lots of these providing time period sheets imagine there could possibly be “a mass exodus from Robinhood” and need a strategy to seize that worth.

Public not too long ago shook up its business model, transferring from producing income from order movement funds, a key approach that Robinhood monetizes, to amassing ideas from customers in change for executing their orders. Fee for order movement, or PFOF, has grow to be a touchstone within the debate surrounding low-cost buying and selling platforms, and the way customers might pay for his or her transactions if not in direct charges.

Traders betting on Public, then, can be inserting a wager on not merely future consumer progress, however the startup’s capability to monetize successfully sooner or later.

The sources for this story had been granted anonymity because of the sensitivity of the discussions.

Public grew rapidly in 2020, increasing its consumer base by a a number of of 10 because the begin of the yr.

Co-founder Leif Abraham instructed TC’s Alex Wilhelm in December that the corporate’s progress has been constant as an alternative of lu.mpy, increasing at round 30% every month. The co-founder additionally harassed that almost all of Public’s customers discover its service organically, implying that the startup’s advertising prices haven’t been excessive, nor its progress artificially boosted.

We don’t know but how a lot Public is elevating in its Sequence D, or who all is investing. Public has not responded to a number of requests for remark. VC agency Accel — which led its Series A, B and C rounds — additionally declined to remark. However we’ll undoubtedly report particulars as we get them.