Архив метки: IPO

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

Spotify tests native voice search, groundwork for smart speakers

Now Spotify listens to you instead of the other way around. Spotify has a new voice search interface that lets you say “Play my Discover Weekly,” “Show Calvin Harris” or “Play some upbeat pop” to pull up music.
A Spotify spokesperson confirmed to TechCrunch that this is “Just a test for now,” as only a small subset of users have access currently, but the company noted there would be more details to share later. The test was first spotted by Hunter Owens. Thanks to him we have a video demo of the feature below that shows pretty solid speech recognition and the ability to access music several different ways.

Voice control could make Spotify easier to use while on the go using microphone headphones or in the house if you’re not holding your phone. It might also help users paralyzed by the infinite choices posed by the Spotify search box by letting them simply call out a genre or some other category of songs. Spotify briefly tested but never rolled out a very rough design of “driving mode” controls a year ago.
Down the line, Spotify could perhaps develop its own voice interface for smart speakers from other companies or that it potentially builds itself. That would relieve it from depending on Apple’s Siri for HomePod, Google’s Assistant for Home or Amazon’s Alexa for Echo — all of which have accompanying music streaming services that compete with Spotify. Apple chose to make its HomePod speaker Apple Music-only, cutting out Spotify. Its Siri service similarly won’t let people make commands inside third-party apps, so you can ask your iPhone to play a certain song on Apple Music, but not Spotify.
To date, Spotify has only worked with manufacturers to build its Spotify Connect features into boomboxes and home stereos from companies like Bose, rather than creating its own hardware. If it chooses to make Spotify-branded speakers, it might need some of its own voice technology to power them.

Spotify is preparing for a direct listing that will make the company public without a traditional IPO. That means forgoing some of the marketing circus that usually surrounds a company’s debut. That means Spotify may be even more eager to experiment with features or strategies that could be future money-makers so that public investors see growth potential. Breaking into voice directly instead of via its competitors could provide that ‘x-factor.’

For more on Spotify’s not-an-IPO, check out our feature story:

Going public pits Spotify’s suggestions against everyone

Spotify tests native voice search, groundwork for smart speakers

Stitch Fix is crashing after its first-ever earnings report

 Stitch Fix’s first earnings report is not going well for the company, as its shares went into a tailspin after a significant run up over the past month following its IPO when it delivered its results its most recent fiscal quarter.
Stitch Fix, a personalized apparel company that ships a box of recommended items that users can buy or send back, closed up just 1% on its first day of… Read More

Stitch Fix is crashing after its first-ever earnings report

Dropbox is reportedly inching closer to a potential IPO

 Dropbox may be taking another step in its very slow shuffle toward an IPO, and is now working with Goldman Sachs to prepare documents that could be filed as soon as this year, according to a report by Bloomberg. The company is expected to hire Goldman Sachs as the lead advisor of the IPO process, according to the report. Read More

Dropbox is reportedly inching closer to a potential IPO

Blue Apron COO Matthew Wadiak steps down in post-IPO shakeup

 Blue Apron announced several changes at the executive level today, including co-founder Matthew Wadiak stepping down from the COO role to become a senior advisor. Wadiak’s changing role comes after a painful IPO for the meal kit delivery service, which first had to reduce its original IPO price and has since seen a significant drop in its share price. Read More

Blue Apron COO Matthew Wadiak steps down in post-IPO shakeup