The TechCrunch Exchange: Startups, Markets, and Funding

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Let's delve into the latest developments concerning funding, startups, and emerging IPO possibilities.

Public Secures New Funding

TechCrunch recently reported that Public, a stock trading platform geared towards consumers, is currently seeking additional investment. Further details, as reported by Business Insider, suggest a potential funding round of approximately $200 million, valuing the company at $1.2 billion. Tiger Global Management is reportedly considering leading the investment.

Positioning Against Robinhood

Public aims to differentiate itself from Robinhood. The company emphasizes a social investing experience and has moved away from payment for order flow (PFOF), a practice that has been a key revenue source for Robinhood and a subject of scrutiny. This strategic shift has positioned Public favorably as investors seek alternatives.

In light of recent challenges faced by its competitor, investors are now prepared to recognize Public as a unicorn.

Robinhood's Recent Capital Raise

The Public funding news follows Robinhood’s substantial $3.4 billion raise. This deal was notable for both its considerable size and the speed at which it was completed. Investors rallied to provide Robinhood with the necessary capital to support ongoing consumer trading activity.

Strong financial results from Q4 2020 and projected growth in Q1 2021 justified this significant investment.

The Importance of User Growth and a Sustainable Model

The investment in Public is logical, contingent on two key factors: (1) substantial user acquisition and (2) the development of a viable long-term business model. While we cannot assess the latter at this time, we can comment on the former.

Increased Investor Interest

Data from M1 Finance, a consumer fintech company based in the Midwest offering stock-buying services, provides insight into current market trends. M1 Finance reported a fourfold increase in sign-ups in January compared to December.

Furthermore, sign-ups in the most recent two-week period were six times higher than in the preceding two weeks.

Inferences from M1 Finance Data

Although M1 Finance does not offer traditional trading – a point consistently emphasized by its team – we can reasonably infer a significant surge in consumer interest in investing. This heightened interest helps explain why Public, actively seeking a sustainable revenue stream, can secure another funding round shortly after closing a previous investment.

The Rise of Savings and Investing

Our previous observations regarding the growing importance of savings and investing are proving to be even more accurate than initially anticipated.

Market Updates

The week concluded with Coupang submitting its initial public offering (IPO) paperwork. A preliminary analysis is available here, and this event is anticipated to generate significant attention. Several other companies also pursued public listings this week.

Matterport is preparing to go public through a special-purpose acquisition company (SPAC). I discussed Metromile’s insurtech IPO, also completed via a SPAC, with CEO Dan Preston.

Oscar Health’s IPO filing was submitted, but initial assessments are not particularly encouraging. Consequently, its eventual valuation will be closely scrutinized by investors. Bumble, however, experienced a different outcome, pricing its IPO above expectations and subsequently seeing its stock price surge upon commencement of trading.

Natasha and I, contributing to Equity, have compiled insights from Bumble CEO Whitney Wolfe Herd, which will be shared early next week. I also had the opportunity to discuss the IPO process with the BBC on several occasions, with the first interview accessible here.

The anticipated public debut of Roblox was also a prominent topic this week. The company reported larger-than-expected growth last year, but may postpone its direct listing until March.

In related news, Carta has begun facilitating trading of its own shares, following reports of revenues reaching approximately $150 million. While this is a positive development for Carta, a traditional IPO remains a possibility. The company’s valuation experienced a doubling during recent secondary transactions.

Numerous noteworthy venture capital funding rounds occurred this week, exceeding my capacity to cover them all. The funding round for Koa Health is one example, as is the recent news concerning Slync.io. For updates on earlier-stage investments, explore recent rounds from Treinta, Level, Ramp, and Monte Carlo.

Finally, a special mention to Ontic, a provider of “protective intelligence software,” which reported a 177% revenue increase last year. Their transparency in sharing these figures is appreciated, and the growth rate is noteworthy.

A Diverse Collection of Insights

Concluding this week's updates, a final piece of information is presented, sourced from Mark Mader, the Chief Executive Officer of Smartsheet. Smartsheet is a publicly traded company, originally founded as a startup, and operates within the realms of no-code development, automation, and collaborative work environments.

This represents a concise overview of the company’s focus. I recently inquired with Mader regarding emerging no-code trends observed throughout 2021, given my ongoing interest in this evolving sector.

Below is the response he provided for publication:

Further developments are anticipated!

Alex