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As retail investors look beyond Robinhood, Public focuses on community building, education

Public.com is one of many retail investment platforms which has seen massive growth in the past 18 months, with JMP estimating more than 7.8 new retail clients entered the market in January and February of 2020.

Despite a huge influx of users in early 2020, when GameStop stock was going “to the moon” and trading platforms were shutting down trading of volatile stocks, Public is now seeing a new phase of investment built on long-term growth.

“That growth has been sort of driven by this heightened interest in, you know these meme stocks and the entire craze around that,” Public co-CEO Jannick Malling said at the 2021 CB Insight’s Future of Fintech event, “but what we’re seeing today is that sort of the next phase, which is really more about making people real investors and that’s always what we really wanted.”

As that next phase comes, Public has shifted its focus from trying to grow the pure number of retail investors on the app, to building a community of everyday people that can learn and grow about investment together.

“It’s also a community that is focused on education, building people’s financial literacy, not just like startups and other things of that nature,” Malling said, highlighting recent products launched within the app, which include social audio show Public Life and Q&A feature Public town hall.

Malling says that he believes that 150 to 200 million Americans will have an investing app on their phone’s home screen in the coming years, and says that in order to make that happen you need to have high engagement and low churn.

He says that to achieve both of those, the company has to operate as a hybrid between the high engagement day trading model and the passive, long-term investing model.

“We think this next generation is really going into something that sits in the middle, kind of like a hybrid version, where it’s very high engagement, but engagement doesn’t come from day trading. It comes from being active around your portfolio, it comes from constantly educating yourself in the context of a community alongside other people,” Malling said.

“But it’s also very low churn, because it’s predominantly longer term investing, 90% of our users identify as long term investors. And so that’s sort of the sweet spot that we have found.”

We spoke with Victoria Chow, Communications Lead at Public.com, who says that while “meme stocks” brought a large amount of new investors into the market, the company has found a high portion of those have gone on to build a diverse portfolio.

“81% of people who bought a meme stock actually went on to build a diverse portfolio, which I think pushes beyond some of those stereotypes,” Chow said.

“We are noticing a trend of parents on the app, who are actually using Public to help their kids learn about investing [and] invest their own stock,” she said, noting another demographic using Public as a way of learning.

“I would say similarly we see cohorts of college students who are meeting each other on the app … maybe on campus they offer a personal finance class, most don’t, but if they do it still feels really basic, and so they go to Public to learn about the stock market and talk to people across the country.”

In other recent fintech news, Nationwide is partnering with Amazon to offer Business Prime members insurance, with discounts in a pilot program running through December 2021. Unicorn Chargebee also acquired RevLock in an attempt to amplify automated revenue recognition.

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