Public.com Secures New Funding Amidst Market Shifts

Public.com, a stock trading platform distinguished by its social features and commission-free trading, is reportedly close to finalizing a Series D funding round. This development occurs just two months following a $65 million Series C raise, as confirmed by sources who spoke with TechCrunch.

Details of the Series D Round

Business Insider reports that the San Francisco-based fintech company is seeking $200 million in funding, which would value the company at $1.2 billion. Tiger Global Management is leading this investment round.

Neither Public.com nor Accel, the venture capital firm that spearheaded the company’s Series A, B, and C funding rounds, have responded to requests for comment regarding this matter.

Public.com's Unique Approach to Investing

Public differentiates itself by enabling investors to purchase shares of companies with any amount of capital. The platform prioritizes community engagement and interaction over high-frequency trading.

It operates within a competitive landscape alongside companies like Robinhood and M1 Finance, all offering consumers low-cost or zero-fee access to equity investments.

Investor Interest Spurred by Recent Events

The platform has reportedly experienced a surge in investor interest in recent weeks. This heightened attention followed challenges faced by Robinhood, which necessitated a rapid $3.4 billion capital raise to address liquidity concerns.

Consequently, some investors are now seeking opportunities within rival platforms like Public.com.

Potential for Market Share Capture

A source shared with TechCrunch that numerous potential investors anticipate a possible “mass exodus from Robinhood” and are positioning themselves to benefit from any resulting shift in market share.

A Shift in Revenue Model

Public.com recently altered its business model. It moved away from relying on payment for order flow (PFOF) – a common revenue stream for Robinhood – and now solicits voluntary tips from users for order execution.

PFOF has become a central point of discussion regarding the economics of low-cost trading platforms and the transparency of transaction costs.

Investment as a Bet on Future Monetization

Investors backing Public.com are essentially wagering on the company’s ability to achieve sustained user growth and, crucially, to effectively monetize its platform in the long term.

Growth and Organic Acquisition

The sources contributing to this report were granted anonymity due to the confidential nature of the discussions.

Public experienced substantial growth throughout 2020, increasing its user base tenfold since the beginning of the year.

In a December interview with TC’s Alex Wilhelm, co-founder Leif Abraham highlighted the company’s consistent monthly growth rate of approximately 30%. He also emphasized that a significant portion of Public’s user acquisition is organic, suggesting efficient marketing and sustainable expansion.

Previous Funding Rounds

Since its launch in 2019, Public has secured a total of $88.5 million in funding from investors including Accel, Greycroft, Advancit Capital, Dreamers VC (with participation from Will Smith), and Keisuke Honda. Additional investors include NFL star J.J. Watt and Sophia Amoruso, founder and CEO of Girlboss, as per Crunchbase data.

This article has been updated to incorporate further details regarding the reported funding.