Despite the pandemic disrupting global economic activity, stocks, for the most part, have surged from the catastrophic March 2020 lows. With lockdowns keeping people isolated at home, worrying about their economic futures, many took to day trading and short-term trading, fueled with stimulus and pandemic unemployment assistance. Others joined in on the fun because they were bored. This unprecedented shift led to the creation of retail trading blocs that for the first time in history represented formidable competition to established hedge funds and professional money managers. Remember Gamestop and AMC? The number of shares traded by the customers of large brokers rose from 700M shares a day before the pandemic to 2.9B per day earlier this year. Stocktwits is the pioneering social platform for investors and trading to come together to discuss, learn, evaluate and generate investment ideas. Credited with devising the social dollar-sign hashtag or “cashtag” to represent tickers ($), the platform founded back in 2008 in the midst of a different financial crisis, surged in popularity during the pandemic with traders and investors using the platform for forums, research, trading rooms, quotes, news, and sentiment analysis. Stocktwits now has over 5M active monthly users for its freemium product that offers a number of enhanced features for paid users including proprietary research and access to subscriber communities.
AlleyWatch caught up with Stocktwits CEO Rishi Khanna to learn more the company’s mission to build a global hub for investors, strategic plans, latest round of funding, which brings the total funding raised to $43.2M, and much, much more.
Who were your investors and how much did you raise?
Stocktwits has raised $30M in Series B funding, led by Alameda Research Ventures and joined by Times Bridge.
Tell us about the product or service that Stocktwits offers.
Stocktwits is the first social platform for investors and traders across all asset classes including stocks, crypto, and other emerging investments. The platform connects the investing and trading communities by organizing conversations around tickers enabling users to share ideas and get insight into what investors and traders are saying.
Stocktwits is the first financial platform with social in its DNA. We pioneered the cashtag (e.g. $AAPL) and were the first online medium to organize conversations around tickers.
What market does Stocktwits target and how big is it?
Stocktwits targets the individual investor market. Stocktwits currently has over 6M registered users, and its monthly audience is over 5M unique users.
What’s your business model?
Stocktwits’ business model is primarily ad-based. We also earn some revenue from subscription services. In the coming months, we will have a few new diversified streams of revenue.
What are your post-COVID office plans?
As of right now, we are a remote-first company with a geographically dispersed team. We still have our offices in NYC, but we don’t have any requirement to be in office due to the evolving nature of the pandemic.
What was the funding process like?
We shared our vision for Stocktwits’ future and began to lean toward strategic partners where we felt a partnership would be beneficial for both parties. We felt strongly that Alameda Research Ventures and Times Bridge of The Times Group really supported our vision for Stocktwits and would be able to support us in our goals for the near and long term.
What are the biggest challenges that you faced while raising capital?
The largest challenge we faced while raising capital was determining which firms would help us execute on our greater vision for Stocktwits. We have excelled with our core offering for some time now but felt it was crucial to find the right strategic partners to help us expand into new categories and markets that will serve our users’ interests.
What factors about your business led your investors to write the check?
Our investors were impressed with our scale, high rate of user engagement, and the opportunity within our vision ahead. Stocktwits is ready to move into its next stage as the global hub for conversation for all investors, and this funding is the catalyst to do so.
What are the milestones you plan to achieve in the next six months?
Heading into the new year, we plan to roll out key new offerings for our users across the asset classes that they are most interested in. In terms of international growth, we are starting in India and expect to expand to a few additional countries by the end of 2022.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Assuming you can’t get a fresh injection of capital, look internally and ask yourself what you can improve. Focus on the fundamentals of what you’re trying to accomplish with the funding, what the atomic units of success for your business are, and how you can drive towards those milestones.
Where do you see the company going now over the near term?
As a company, we’re focused on three things: expanding the value we deliver to our community with our product offerings, expanding the asset classes we cover to include everything that individual investors and traders have access to, and expanding geographically. In the near term, we’re specifically focused on expanding our offerings in crypto and NFTs, to match increased investor interest.
What’s your favorite outdoor dining restaurant in NYC?
Isn’t every restaurant an outdoor dining restaurant now? Forgione is one of my personal favorites for a nicer restaurant and they have a solid outdoor space!