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The Robinhood Competitor Landscape Intensifies As Invstr Raises $20m

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Even the most unskilled new investors can now invest, thanks to Robinhood. Critics contend that the company’s business model is not without risk, even though it has drawn millions of users with its no-fee, gamified approach.

One of the major complaints regarding investment applications is that they are not acting responsibly by failing to adequately educate users and purportedly leaving them to fend for themselves. The number of lawsuits against Robinhood proves that doing this can cause customers to lose a significant amount of money. as per Robinhood $20m series invstrAzevedotechcrunch

An eight-year-old business that has only ever focused on financial education is now providing banking and trading services in the United States.

The London-based company Invstr has developed an educational platform with elements like an investing academy. To help players better understand the markets before jeopardizing their own money in the real world, it has developed the Fantasy Finance game, which allows users to manage a fictitious $1 million portfolio. Invstr has made it its mission to make learning enjoyable through social gamification. As per Robinhood $20m series invstrAzevedotechcrunch

Additionally, a community has been create around users so they can benefit from one another (something another Robinhood competitor Gatsby is also doing).

The platform has been downloaded by more than 1 million people worldwide

According to CEO and creator Kerim Derhalli, Invstr is different from rivals because it provides teaching and learning materials immediately. Additionally, it offers consumers a means to the bank. It invests digitally using its Invstr+ accounts “without ever needing to shift money from one place to another,” enabling commission-free stock trades.

For subscribers who have access to an “Invstr Score,” performance statistics, and behavioral analytics, among other things, Invstr takes everything a step further.

Derhalli claimed that taking the business in this direction from the beginning was part of his business plan

Derhalli told, “I believe self-directed investing to be the most significant trend in the United States.” Younger generations have grown up in an age of apps and aspire to be independent and self-sufficient. Many people mistrust the banking industry and don’t want to go down the same financial paths as their parents.

In addition to announcing the launch of its new offers, Invstr revealed on Wednesday that it had closed on a $20 million Series A convertible offering. The $20 million it raise over two see rounds from investors like Ventura Capital, Feinberg, European angel investor Jari Ovaskainen, and Rick Haythornthwaite, a former global chairman of Mastercard, gets add to with this. As per Robinhood $20m series invstrAzevedotechcrunch

Derhalli claimed that after personally witnessing how people’s lack of information and confidence might deter them from beginning to invest, he was forced to start Invstr. Before creating Invstr, he spent three decades in senior executive positions at Deutsche Bank, Lehman Brothers, Merrill Lynch, and JPMorgan. His motivation was to make investing accessible to everyone, wherever.

Together with Apex Clearing, which formerly provided execution and settlement services to Robinhood, Invstr is launching its new investment services.

Through a collaboration with Vast Bank, it is providing digital banking services. Invstr claimed that Okta technology safeguards its user data regarding security issues.

The business, which also maintains offices in New York and Istanbul, intends to begin new brokerage & analytics devices & the portfolio builder.

By making trading simple and, more significantly, free, Robinhood gives millions of novice investors quick access to the stock markets.

Robinhood has grown to be one of the most well-known and significant finance apps worldwide since its 2013 release. From barely 500K in 2015, it now boasts more than 18M funded users. As per Robinhood $20m series invstrAzevedotechcrunch

Aiming for a $40B valuation before going public, Robinhood generates a significant portion of its income from razor-thin margins on vast volumes of individual trades. This business model is both profitable and possibly risky.

Due to the retail trading craze, a record $70 million FINRA fine, ongoing congressional inquiry, trading outages, and worsening customer support issues, Robinhood has received a lot of attention in the past year. In addition, its most recent S-1 filing revealed that Robinhood earned a $7.3M profit in 2020 despite increased attention and a rapidly expanding user base, up from a $107M net loss the year before.

Final Verdict,

Although the company’s first-quarter revenue of $522 million in 2021 was treble that of Q1 of 2020, financial losses increased from $53 million to $1.4 billion during the same period. Options trading made up the most significant portion of Robinhood’s Q1’21 order revenue (38% of its overall revenue), followed by stocks (26%) and cryptocurrency (17%).

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