This is the web version of Term Sheet, a daily newsletter on the biggest deals and dealmakers. Sign up to get it delivered free to your inbox.
Sequoia Capital may be a major investor in Robinhood, but it doesn’t think stock-picking will take over all of investing.
In a bet consumers won’t put all their investing dollars into robo-advisors and stock-picking apps, the venture capital firm is leading a $45 million Series B round in Vise, a startup seeking to automate time-consuming tasks for independent investment advisors while shaping individualized portfolios for their clients with the help of A.I. Since Vise’s revenue comes from the assets it helps advisors manage, it does appear to indirectly compete with companies like Robinhood for the same investing dollars.
But Sequoia Partner Ravi Gupta says he believes the pie is big enough that all these companies can co-exist together. “We don’t see Robinhood as a competitor—we think Robinhood is thriving and will continue to thrive,” says Gupta to Term Sheet, adding customers of investment advisors tend to skew older while Robinhood’s users tend to be millennials. As a result of the deal, Sequoia will hold two board seats within the company. That’s not to forget: The company was founded in 2016, when the duo were just teenagers. Read more.
Other investors also seem to think there is more space for even more direct competition too. As soaring stock markets and boredom have taken over the psyches of those locked in at home, would-be Robinhood challengers are also taking advantage of the times.
Public, a stock-trading app that is directly competing with Robinhood, has raised $65 million in Series C funding with Accel leading the round. Seeking to differentiate itself with a social element in which users can share their stock picks, the company has signed on prominent folks in media, including Scott Galloway, skateboarder Tony Hawk, and The Chainsmokers band member Alex Pall. That comes amid a story that Robinhood is losing traders to another platform, WeBull.
The question for Public: Will it have a place in a world dominated by Robinhood? In theory, the social element makes a lot of sense to me. Stock trading is an insanely social activity. Retail traders are aggressively loud on Twitter and Reddit where they both fight and discuss each other’s investments. And unlike on Venmo where few want to broadcast their dinner payments, investors like to broadcast when they win, and even sometimes when they lose. Social media is a great place for celebration and commiseration, and stock trading can be a massive cause for both.
But the reality is, Robinhood still stands far above its competitors and stock pickers are still gravitating to the existing social platforms to air their successes and grievances. If Public maintains its strategy for getting to the top, it won’t just be about acting like a TDAmeritrade or a better stock-picking app, but also as a better social-media platform too. Read more.
IPO LAND: We may not see the IPOs of Affirm or Roblox before year end, but do keep an eye out for Wish, the e-commerce platform that sells bargain goods primarily sourced from China. The company is set to price its IPO today, after indicating that it plans to raise about $1.1 billion.
Email: [email protected]