Public Appoints First Independent Board Members, Announces 2021 User Growth

Public App Announces New Board Members and Details Growth

This day, Public, a U.S.-based investment application, revealed the addition of two individuals to its board of directors.

The company also shared insights into its expansion during the COVID-19 pandemic, a time that proved beneficial for many platforms facilitating savings and investment activities.

New Board Appointments

Joining the Public board are Jessica Neal, previously the chief talent officer at Netflix and currently a venture partner at TCV, and Christopher J. Brummer.

Brummer is a professor at Georgetown University, a director at Fannie Mae, and an advisor to Paradigm, an investment firm specializing in cryptocurrency ventures.

(Paradigm was recently highlighted for its participation in a funding round alongside Sequoia, targeting trading firm Citadel Securities.)

Strategic Alignment with Company Goals

TechCrunch interviewed Public’s co-CEOs, Leif Abraham and Jannick Malling, regarding these new appointments.

The selections reflect Abraham’s emphasis on the company’s priorities last year: expanding business operations and strengthening its workforce.

Neal’s expertise directly addresses the human resources aspect of this growth, while Brummer’s background in fintech and crypto regulation aligns with Public’s operational needs.

Specifically, Brummer’s knowledge will be valuable as Public navigates the evolving regulatory landscape within the financial technology sector.

These additions are intended to bolster Public’s capabilities as it continues to scale and innovate within the investment app market.

The Surge in Savings and Investment Activity

Extensive coverage in TechCrunch documented the significant increase in savings and investment activity observed in 2020 and 2021. Individuals across numerous nations increasingly engaged with equity and cryptocurrency trading platforms as global savings rates climbed and market volatility intensified.

This trend was largely analyzed through the performance of companies like Coinbase and Robinhood. Both firms launched initial public offerings in 2021, providing valuable data regarding their financial performance and the overall consumer demand for both cryptocurrency and equity investment and trading services. (Public began supporting both equities and crypto assets in October of the previous year.)

Public capitalized on the growing consumer interest in financial products and services, securing substantial funding in a short timeframe. As an illustration, the company announced a $65 million Series C funding round in December 2020, followed by an additional $220 million in February 2021. Achieving a valuation exceeding $1 billion, this new unicorn quickly became a key company to monitor within the consumer fintech sector.

Similar rapid fundraising activity was seen at other companies. M1 Finance, headquartered in Chicago, is a prime example, completing multiple funding rounds throughout the past year as its assets under management (AUM) experienced rapid growth.

While M1 Finance openly shared its AUM figures and its target of generating approximately 1% revenue for every dollar managed, Public remains more reserved regarding its growth metrics.

The company reported a 700% increase in “funded accounts” over the last year. However, its leadership offered limited details regarding revenue, stating that their priorities for the current year include “expanding platform capabilities” and exploring “new monetization strategies.”

Public’s reluctance to discuss revenue in detail alongside user growth is understandable. It’s important to remember that Public made the decision to discontinue payment for order flow (PFOF) revenue last year, deliberately differentiating itself from Robinhood’s primary revenue source. The company indicated it would instead rely on voluntary contributions from its user base.

Public’s successful fundraising efforts provided the financial flexibility to prioritize growth over immediate monetization. However, 2022 is expected to be a critical year for the company to establish a sustainable revenue model. In discussions with TechCrunch, Abraham and Malling affirmed their satisfaction with the decision to forgo PFOF income. Their reasoning centered on the inherent instability of transactional revenue streams and their desire to position Public as an investing application rather than a trading platform, making revenue tied to trading volume inconsistent with their core values.

Despite this, the company operates as a business with significant ambitions. The CEOs expressed confidence in the size of their potential market – a large total addressable market (TAM), in venture capital terminology – suggesting that their focus on developing community features and scaling their technology will yield positive results as they attract more users.

Notably, approximately half of Public’s customer acquisition is organic. Furthermore, the company reported that customer acquisition costs were not increasing as the user base expanded. This supports the notion that a substantial segment of the population is still seeking a suitable platform for investing and trading.

TechCrunch inquired about the potential for horizontal expansion, given the trend of consumer-focused fintech products evolving into comprehensive financial super apps. Public’s leadership stated that they have no intention of becoming a bank.

Therefore, Public remains committed to its core strategy of building a community-driven investing service. The coming year will reveal how effectively the company can increase its revenue per user, having already established a substantial user base.