Архив метки: CFO

Robinhood aims at IPO as the fintech startup seeks CFO

Now valued at $5.6 billion, zero-fee stock trading app and cryptocurrency exchange Robinhood is starting preparations to go public. Just a year and a half ago, it was still largely under the radar. But then it raised a $110 million Series C at a $1.3 billion valuation in April 2017 and then just a year later scored a $363 million Series D, both led by Russian firm DST Global. Combined with the growth of its premium subscription for trading on margin called Robinhood Gold, the startup now has the firepower and revenue to make a viable Wall Street debut.
Today during Robinhood CEO Baiju Bhatt’s talk at TechCrunch Disrupt SF, he revealed that his company is on the path to an IPO and has begun its search for a chief financial officer. It’s also undergoing constant audits from the SEC, FINRA and its security team to make sure everything is kosher and locked up tight.
The CFO hire could help the five-year-old Silicon Valley startup pitch itself as the cheaper youthful alternative to E*Trade and traditional stock brokers. They’d also have to convince potential investors that even though cryptocurrency prices are in a downturn, allowing people to trade them for cheaper than competitors like Coinbase is a powerful user acquisition funnel.

Robinhood now has 5 million customers tracking, buying and selling stocks, options, ETFs, American depositary slips receipts of international companies and cryptos like Bitcoin and Ethereum. That’s twice as many customers as its incumbent competitor E*Trade despite it having 4,000 employees compared to Robinhood’s 250.
The startup has raised a total of $539 million to date from prestigious investors like Andreessen Horowitz, Kleiner Perkins, Sequoia and Google’s Capital G, allowing it to rapidly roll out products before its rivals can react. This rapid rise in valuation can go to some founders’ heads, or crush them under the pressure, but Bhatt cited “friendship” with his co-CEO Vlad Tenev as what keeps him sane.
The startup has three main monetization streams. First, it earns interest on money users keep in their Robinhood account. Second, it sells order flow to stock exchanges that want more liquidity for their traders. And it sells Robinhood Gold subscriptions which range from $10 per month for $2,000 in extra buying power to $200 per month for $50,000 in margin trading, with a 5 percent APR charged for borrowing over that. Gold was growing its subscriber count at 17 percent per month earlier this year, showing the potential of giving trades away for free and then charging for extra services.

But Robinhood is also encountering renewed competition as both startups and incumbents wise up. European banking app Revolut is building a commission-free stock trading, and Y Combinator startup Titan just launched its app that lets you buy into a  managed portfolio of top stocks. Finance giant JP Morgan now gives customers 100 free trades in hopes of not being undercut by Robinhood.
Over on the crypto side, Coinbase continues to grow in popularity despite its 1.4 percent to 4 percent fees on trades. It’s rapidly expanding its product offering and the two fintech startups are destined to keep clashing. Robinhood may also be suffering from the crypto downturn, which is likely dissuading the mainstream public from dumping cash into tokens after seeing people lose fortunes as Bitcoin and Ethereum’s prices tumbled this year.
There’s also the persistent risk of a security breach that could tank Robinhood’s brand. Meanwhile, the startup uses both human and third-party software-based systems to moderate its crypto chat rooms to make sure pump and dump schemes aren’t running rampant. Bhatt says he’s proud of making cryptocurrency more accessible, though he didn’t say he felt responsible for prices plummeting, which could mean many of Robinhood Crypto’s users have lost money.

Fundamentally, Robinhood is using software to make the common but expensive behavior of stock trading much cheaper and more accessible to a wider audience. Traditional banks and brokers have big costs for offices and branches, trading execs and TV commercials. Robinhood has managed to replace much of that with a lean engineering team and viral app that grows itself. Once it finds its CFO, that could give it an efficiency and growth rate that has Wall Street seeing green.

Robinhood aims at IPO as the fintech startup seeks CFO

That’ll Fly: Kayak Closes IPO Day With Shares Up Nearly 30% And Market Cap Over $1.2B

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It’s been a long time in coming. After first filing to go public in late 2010, Kayak finally came to market today debuting as a public company on NASDAQ, trading under “KYAK.” The travel bookings company has hit its fair share of bumps along the way, thanks to unsteady market conditions, erratic earnings, and a departing CFO.

All that has been washed away over the last 48 hours (at least for the time being), as Kayak exceeded the original $21 to $25 price range it set, raising $91M and opening at $26/share this morning. Not only that, but at the close of its first day as a public company, Kayak’s shares have jumped nearly 30 percent, finally resting at $33.18.

While it’s not the $115B market cap Facebook opened with, Kayak’s first day performance gives it a market capitalization that is nothing to scoff at — and makes just a tiny bit more sense. The prospectus shows that Kayak has 38.5 million shares outstanding after its IPO, giving the company a market cap today of just about $1.27 billion. Of course, those 38.5M shares don’t include the 9M stock options that can be exercised over the years. So, if you agree with SeekingAlpha, there’s going to be some dilution and after private placement, etc., that number could rise to $41.5M, potentially raising market cap to $1.36B.

Either way, not bad for a day’s work. And not bad considering a year ago, considering the company was posting a net loss a year ago. However, in the first quarter, Kayak turned that frown upside down, posting Q1 net income of $4.1M and grew revenue by 39 percent to $73.3M.

While it was a great day for the company, Kayak definitely still has a lot to worry about. Personally, I like Kayak a lot and use it consistently. However, I’ve also started to use Hipmunk to complement Kayak, and if I could get Hipmunk to change a few things, it wouldn’t be unreasonable to see myself switching over full-time. I’m sure some other readers may be in a similar boat.

So there’s competition from sites like Hipmunk (and potentially from companies like Superfly, which Kayak’s departed CFO now advises), or perhaps a more salient threat will come from Google. Er, Google Travel. Google bought ITA, which happens to be the same travel search provider that Kayak bases its results on. And, really, just about everyone else.

Of course, look, right now there’s not going to be huge, huge variations in the results from these different sites. Most of them use ITA, and every day there’s one less airline, so there is a limit. Granted, the next generation of travel sites will (like everything else on the Web) eventually offer a far more personalized/tailored search experience, better deals, will be more intuitive and mobile, rather than bland, desktop-first, commoditized product experiences.

But until then, this really comes down to the interface. It’s all about who can offer the fastest search and the most options/permutations for travel search in the most simple layout. These companies make money on lead-gen, but really they should look and act like smart CRM tools. And just because Google owns search, doesn’t mean it’s going to own travel search. It’s an easy case to make, but there are also all kinds of competitive advantages in not being Google, focusing purely on travel search and the experience, discovery of travel, and focusing on the mobile piece.

Sarah wrote a great summary of Kayak today, so we won’t go over the same ground again, but Kayak finally started really paying attention to its mobile products at the end of last year, updating its UI across mobile and Web, and that (along with direct booking) seems like it’s beginning to pay off.

Don’t mean to keep editorializing here, but I’m under the impression that things like travel search will continue to become more and more popular on mobile devices. That changing user behavior isn’t going to suddenly stop. So, when looking at these companies, it makes one feel crazy when one gets the impression that travel companies don’t totally get that — or that they need to be creating meaningful travel profiles for people and doing this intuitively themselves, not relying on the user to hand over their social security number et al. Mobile is already favored over desktops in international markets, and that’s where these companies are going next anyway.

It’s also tiring to see travel companies be slavish to airlines. Yes, we understand why keeping airlines happy is essential to Kayak, but until I see Delta aggregating JetBlue and American’s ticket prices and flight times and sending users off-site when they don’t have competitive offerings, airlines will continue to need sites like Kayak. Maybe that can be some incentive to start focusing more on the end user.

Anyway, that part of the rant is over. As to Kayak’s market cap? It seems pretty fair. It will probably come down a bit in the near term, because, sure, it needs to begin posting larger gains to really feel like a $1B company. But compared to other public travel sites, like TripAdvisor, it doesn’t look bad, it’s just a matter of whether it can continue growing consistently with reduced margins.

Time will tell, but still a great day for Kayak. As it was for Palo Alto (which also went public today) — read Alex’s coverage here. Oh, and also worth mentioning that a continued good showing from these two companies could go along way towards rejuvenating the IPO market, which has struggled since Facebook did a cannonball/bellyflop, removing most of the water from the pool.

Excerpt image from Nasdaq


That’ll Fly: Kayak Closes IPO Day With Shares Up Nearly 30% And Market Cap Over $1.2B

Apple Will Tell Us Monday How It Plans To Use Its $100B In Cash

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Everyone has been wondering what Apple will do with its outsized cash reserves — currently at just under $100 billion. Tomorrow the company will hold a conference call to tell the world what that will be.

“Tim Cook, Apple’s CEO, and Peter Oppenheimer, Apple’s CFO, will host a conference call to announce the outcome of the Company’s discussions concerning its cash balance. Apple will not be providing an update on the current quarter nor will any topics be discussed other than cash,” read a release from the company.

In other words: a very focused, but potentially huge, bit of news from Apple tomorrow.

The call will take place at 6am Pacific/9am Eastern time, and as with its earnings calls, Apple will also make the call accessible via a webcast.

Between now and tomorrow morning, expect a maelstrom of suggestions from the gallery about what Apple should do, might do and will do with the money it has amassed over the last few years as sales of its iPhone and iPad, sold at what are probably some of the best margins in the business, have gone through the roof.

Will it be something philanthropic? A product? An acquisition or ten? A fund for others to build something? The purchase of a small country? The start of a new one? A dividend (the last one Apple paid was in 1995)?

To be honest, there’s enough cash there to do all of the above, and then some.

Full text of the release with details of the call below.

WHAT: Tim Cook, Apple’s CEO, and Peter Oppenheimer, Apple’s CFO, will host a conference call to announce the outcome of the Company’s discussions concerning its cash balance. Apple® will not be providing an update on the current quarter nor will any topics be discussed other than cash.
WHERE: Via conference call. The dial-in number for press is (877) 616-0063 (toll-free) or (719) 219-0041. Please enter confirmation code 592016.
WHEN: Monday, March 19, 2012 at 6:00 a.m. PDT/9:00 a.m. EDT
REBROADCAST: The conference call will be available as a continuous rebroadcast beginning Monday, March 19 at 9:00 a.m. PDT/12:00 p.m. EDT through Monday, April 2 at 9:00 a.m. PDT/12:00 p.m. EDT. The dial-in number for the rebroadcast is (888) 203-1112 (toll-free) or (719) 457-0820. Please enter confirmation code 6274937.
WEBCAST: Apple will provide live audio streaming of its conference call using Apple’s industry-leading QuickTime® multimedia software. The live webcast will begin at 6:00 a.m. PDT on March 19, 2012 at www.apple.com/quicktime/qtv/call31912 and will also be available for replay for approximately two weeks thereafter. The webcast is available on any iPhone®, iPad®, iPod touch® or any Mac® or PC running QuickTime 6 or later. If you do not have QuickTime installed on your Windows PC, it is available at www.apple.com/quicktime.

This recording is the property of Apple and protected by U.S. copyright law and international treaties. Any reproduction or distribution is strictly prohibited without prior written approval from Apple. Please contact Apple Public Relations or Investor Relations with any questions.

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.


Apple Will Tell Us Monday How It Plans To Use Its $100B In Cash