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

Public.com, A social-focused free stock trading service, Exactly two months after raising, a series is approaching D. $ 65 million series, Sources familiar with the case told TechCrunch.

San Francisco based fintech Active trading aims to provide people with the ability to invest in companies using any amount, with a focus on community activity. It competes with Robinhood, M1 Finance and other US fintech companies that provide a way to consumers Invest in low or zero fee equity.

Public.com clearly saw a flurry of investor interest after Robinhood’s hot water and mandatory foundations over the past few weeks Raised $ 3.4 billion in a few days Helping to get himself out of a mess.

She came at a challenging time for the new capital unicorns, May proceed IPO this year. And Some investors reportedly want a piece of the rival Public.com’s pie.

A source told Tech Crunch that many of those presenting the term sheet believe there could be a “mass exodus from Robinhood” and needed a way to capture that value.

Recent public Shook your business model, Moving from generating revenue from order flow payments, is a key way of Robinhood, which collects suggestions from users in exchange for executing their orders. Order flow, or payment for PFOF, has become a touchstone in the debate around low-cost trading platforms, and how users can pay for their transactions when they are not directly in business.

Publicly betting investors will be betting not only on user growth in the future, but the startup’s ability to effectively monetize in the future.

The sources of this story were given anonymity due to the sensitivity of the discussions.

The public grew rapidly in 2020, expanding its user base to more than 10 since the beginning of the year.

Co-founder Leaf Abraham told TC’s Alex Wilhelm in December that the company’s growth has been consistent, rather than slop, expanding by about 30% each month. The co-founder also stressed that the majority of public users find their service organically, meaning the startup’s marketing costs are not extreme, nor is its growth artificially inflated.

We do not yet know how much Public is increasing its Series D, or who is investing all. The public has not responded to several requests for comment. VC Firm Excel – Joe Led its series A, B and C rounds – Also declined to comment. But we will definitely report the details as we receive them.