When Robinhood, a startup that promises to make finance accessible to all, temporarily limited trading on GameStop, AMC, and other memestock, many retail investors were pissed that the fintech treasure suddenly didn't live up to its name. The specific reasons might be short-lived and technical, but the choice seemed corrupt to the average person.
Here's why: The presence of a huge hedge fund as Robinhood's main partner and backer of short sellers is exactly what Robinhood users are rallying against. The obvious conflict shows that "democratizing finance" has always been an ironic slogan. Retail investors are already pouring into competing apps like Public and Webull and are looking for more short films to tackle.
What can other startups learn? Here are some lessons:
First, the push for decentralized systems will become more aggressive, positioning startups well in the cryptocurrency and DeFi space in general. Thursday, the co-founder of Reddit Alexis Ohanian spoke to the deputy Alexandria Ocasio-Cortez on a Twitch stream about the GameStop saga.
"Nobody will wake up in a week and say we're all back to the way it was. The collective public cannot fail to see this, so I think there will be more and more energy to find decentralized solutions. There is so much energy to rally behind something that it can't fix the game, "Ohanian said. As Bitcoin hits record highs, the collapse of Robinhood adds further momentum to the asset.
My second conclusion is that fintech startups in the retail sector have never been more aware of the iron fist of regulatory pressure. While one company may have fallen on the sword this time around, that doesn't mean other startups are safe and / or capable of promising open doors and a free market forever. The big question for early stage fintech startups is how to innovate during a revolution.
That's all I can understand for now, and there's more to the pod if you're interested. What do you think are the long-term ramifications of this wild Wall Street week on startups? Email me at [email protected] or DM on Twitter @nmasc_.
Sprouts of climatic technology
Early-stage funding for climate technology is lackluster, but category startups need aggressive capital to grow to the right scale (and, you know, save the world from eternal fate). Our reporter Jonathan Shieber covered a number of stories this week that shed light on how many ecosystem investors are realizing the importance of climate technology.
Here's what to know: Robert Downey Jr., launched a new venture capital fund, sponsored by AngelList, to support sustainable startups.
Etc: Why a venture capitalist thinks SPACs are the way to go for cleantech startups. Additionally, an early-stage accelerator launched its latest cohort of sustainable startups.
Long live anything other than the 'Zoom School'
It was extraordinary to see edtech's boom and subsequent consolidation in less than a year. In another busy week for the industry, relieved by the abrupt distance learning force of the pandemic, we have funding, public market debuts and what more than a dozen investors are looking for in the future.
Here's what to know: 13 investors say lifelong learning is taking on mainstream edtech. Consumer edtech has always had an easier time selling, since parents spend more money than a boring institution ever will. The novelty, however, is that there is an opportunity to serve with students beyond school hours. There's a lot more in our investor survey, along with details on what opportunities are fading in the industry and what's the biggest hurdle for an early stage edtech startup.
Etc: A company aiming to become the newly launched science Minecraft class with seed funding from a flurry of investors. A company founded in 2011 spent eight years without monetizing and is now profitable with hundreds of thousands of paid subscribers. Oh, and an unprofitable but growing edtech company is going public via SPAC.
SPAC at the top
SPACs are like weeds: if you pull one out, another pops out! 300 of them, to be exact.
Here's what to know: This week, Chamath Palihapitiya announced two SPAC deals for Latch and Sunlight Financial. My colleague and podcast co-host Alex Wilhelm explained the numbers behind these decisions in an Extra Crunch post.
Etc: Coinbase is going public via direct listing. Squarespace has filed a private instance to go public. WeWork could go public via a reverse merger. And the CEO and founder of Qualtrics sat down with ProWellTech to reflect on its debut: Qualtrics ... it was said that it couldn't bootstrap, that it couldn't build in Utah, that SAP overpaid, that SAP was wrong, and so on, Wilhelm writes.
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For the whole week
How Atlanta's Calendly turned a planning nightmare into a $ 3 billion startup SoftBank allocates $ 100 million to Miami-based startups Internet of Cars: An Introductory Guide to IoT Implementation The Okta SaaS report finds that Office 365 wins the cloud, more or less The Physna three-dimensional search engine wants to be the Google of the physical world Does a $ 27 or $ 29 billion valuation make sense for Databricks? How 2 startups made it to ARR $ 50 million and beyond Talent and capital are shifting the attention of cybersecurity investors from Silicon Valley The 5 biggest mistakes I made as a startup founder for the first time@EquityPod
The news cycle may have been dominated by GameStop, but a lot has happened in the startup and business world this week. So, your favorite trio put together an episode to review what you probably missed.
In this week's show, we got into the amazing story of the founding of Calendly, which just got a $ 3 billion valuation, as well as a run of food-focused startups growing seed rounds. There is also an edtech section and notes on two new funds that you should probably pay attention to.
Okay, exhale. Take care of yourself this weekend, you always deserve it, but especially after a week like this.
Talk to you soon,
Natasha
