The Proliferation of Digital Investing Apps & the Rise of Public.com

Over the course of the COVID-19 pandemic, millions of people have faced difficult financial situations, including losing their jobs or having their savings vanish in an economic downturn. These dire circumstances caused many people to recognize the importance of having investment tools that are trustworthy, transparent, and simplified. The lack of these aspects combined with high barriers to entry for investments may be why an alarming 44% of people in Switzerland and 47% in the US have never invested at all.

Spurred on by the era of digitalization and the growing number of work-from-home jobs, investing apps afford new opportunities to both new and seasoned investors. Digital investing methods make it easier than ever to earn money and grow your wealth by enabling you to diversify your income streams or develop a retirement strategy, for example. Investing apps are critical solutions that can play the role of lifeguard when unforeseen crises emerge, meeting multiple necessities at a low cost.

The pandemic played a major role in accelerating the era of digitalization. The global spread of the virus was a catalyst for change, prompting financial megatrends that altered the course of the wealth industry, and ultimately set up the shift that subsequently occurred.

A Deloitte survey shows that over 75% of all self-employed individuals in Switzerland were negatively impacted in an economic sense by the COVID-19 pandemic, which threw punches globally and indiscriminately. In the US, small-to-medium businesses (SMBs), which comprise the majority of companies throughout the nation and employ close to half of all private sector workers, were hit hard in 2020, suffering a 20% loss of revenue.

Essentially, COVID-19 changed investor attitudes and outlooks, as well as client expectations. Suddenly, on the consumer side, there was a need for higher integrity and standards, paralleled by expectations for lower fees and pricing transparency. Pre-pandemic, switching brokerages was rare. Post-pandemic, with the flexibility afforded by digital investment paths, it became more fluid and common for consumers to switch brokerages if their desired ROI was not being met and they had decided they could get a better deal elsewhere.

With this frame of reference, it’s easy to see how people began searching for answers, and many landed on digital investing.

The Institute of Financial Services Zug (IFZ) of the Lucerne University of Applied Sciences and Arts published a study called Digital Investing in Switzerland – A Market with Potential, revealing that the greatest potential for digital investment opportunities are found among both the public who reach their own independent investment decisions (referred to as ‘soloists’) and similarly among the largest population of so-called ‘validators’. The latter comprises those who make investment decisions with the support of partners or investment advisors. Both of these groups demonstrate an independent orientation and self-reliance. What this means is that the same self-employed individuals who were hit so hard by the pandemic may become prime candidates for digital investment opportunities.

Validators, in particular, seek transparency (57%), user-friendliness (39%), and simplicity (48%) in their digital investment activities. If you are an individual who prioritizes these factors, Public.com is an excellent choice!

Why? Let’s take a further look.

What makes Public a worthy investment option?

The digital investment app space is highly competitive, but Public.com stands out for its transparency and simplicity. From a high-level perspective, it is an investing platform that helps people become better investors. That’s the simple version. Broken down into the specifics, Public is an app available on both iOS and Android with offerings including cryptocurrencies, commission-free stocks, ETFs, and community trading features. The latter is for investors who wish to trade on their own rather than enlisting the guidance of advisor-assisted investing or automated investing. All-in-all, Public provides a holistic investing tool.

With Public.com's latest round, this New York-based company is now valued at USD 1.2 billion, following a USD 220 million Series D investment since its 2017 inception. The great news is that all Moonshot Circle members are entitled to invest in Public.com equity.

Currently, Public has the potential to become one of the most popular investment apps over the next 2–4 years. But how can this be achieved?

1) Strong team of founders and investors

“A leader is one who knows the way, goes the way, and shows the way.” — John C. Maxwell, author

Public.com has the good fortune of being led by spectacular founders: Jannick Malling, and Leif Abraham. Malling began his career working at a bank but quickly realized his interests in technology and entrepreneurship were the perfect intersection for something extraordinary. With that mission and vision, he went on to co-found Public.com. Malling currently serves as the co-founder and co-CEO of Public. Abraham is a serial entrepreneur who has sold businesses to companies like Fiverr and Hanse Ventures, and now serves as co-CEO and board member for Public.

This dynamic duo has developed a truly unique winning formula. Public quickly received interest from Dreamers VC, a venture capital fund founded by Will Smith and Japanese soccer star, Keisuke Honda, as well as garnering interest from NFL star, J. J. Watt, Shari Redstone’s Advancit Capital, and YouTube creator and entrepreneur, Casey Neistat — and the list of prominent investors goes on.

2) Unique features that other companies don't have

Even their stellar team would not be enough to prop up this app long-term unless it was able to stand on its own two feet. Public.com has some distinctive features that give it the strength to do just that.

Transparency

Public emphasizes being upfront and transparent with their platform and policies. Being able to see the founders’ investment portfolios is an example of this. The company also has stellar account security. Public is SIPC-insured, meaning customers’ securities investments are protected and indemnified up to USD 500’000, as well as cash amounts up to USD 250’000. From a technological standpoint, accounts are protected with bank-grade 128-bit encryption, and all data is secured with transport layer security.

Public.com also has a no-commission policy. Not only that, but it charges minuscule trading fees, just fractional SEC & TAF fees, that are required from every brokerage. Regarding these minimal fees, most Public traders will be investing at a low enough volume that they won’t ever pay more than a few cents.

No Payment for Order Flow (PFOF). Unlike many other brokerages, Public does not support the controversial practice of PFOF where brokerages send their customers’ trades to market makers for execution in exchange for rebates. PFOF is problematic as it creates a conflict of interest, which is precisely why Public.com steers clear.

So, how does Public.com make money? The company has various revenue sources, like optional tipping and a premium membership tier. All sources are outlined in this detailed support article, exemplifying the fact that Public puts an emphasis on complete transparency.
Simplicity

Public organizes stocks into investing baskets, known as themes which help point you in the right direction if you’re trying to invest in a particular sector but aren’t sure where to start. Not only that, but themes are relevant to current world events and trends. For instance, you can explore artificial intelligence, crypto, green power, and other popular contemporary topics. Themes elegantly balance tech-, financial-, consumer-, and health-based companies, so you can find the right investments for your portfolio. Some also relate to ESG investing or social causes.

Another way Public simplifies the process is through risk assessments. As in the food market where labels help to differentiate between what’s healthy and what’s not, Public.com puts safety labels on all of their stocks, ETFs, and various other offerings with an identified risk measure, as determined by the Securities and Exchange Commission. While all stocks carry some level of risk, these tags may help investors to identify which products are more volatile than others. For example, a company that has filed for bankruptcy has a higher level of risk than a company that is turning a profit. These safety labels help investors to make more informed decisions.
User-friendliness

Town Halls are historically places where people gather and have a voice heard by the governing body. The concept connotes openness and a sense of community. Public.com has remodeled this concept into their own platform. If you have a question for the CEO of a company you invested in or are thinking about investing in, Public’s Town Hall meetings give you access to these founders and CEOs through live meetings with written Q&As that take place on the app. You can submit questions in advance and tune in to hear the answers. Sessions are usually scheduled a month or two in advance, so there’s plenty of time to plan your attendance. This approach is easy and transparent.

Public investor profiles are another key indicator of transparency and user-friendliness. Public devised this system to enable you to create an investor profile that you can then use to look at other investors’ profiles for ideas and inspiration. Do your own investment research, of course, but this can be a way to satiate your curiosity about what others are doing and pick up some interesting trends and insights along the way.
Each of Public’s leaders has their own account, and there are also some public figures profiles you can find and view. If you choose to connect your contacts through the app, you can locate friends and family with ease, too.

Public is all about individual growth, and their app features an educational platform with a learn-section for people to grow their knowledge. There are over a hundred research studies relating to the stock market, investing, crypto, pre-IPO, and a host of other topics. Knowledge is right at your fingertips.

Booming Market

Public operates in an emerging consumer niche with a three million-plus-strong community of investors, creators, and analysts.

The number of people trading in the financial markets around the world soared during the pandemic due to a combination of factors: People are spending more time at home, investment advice is more accessible, there are more user-friendly mobile apps, and there’s no longer a need for banks, brokers, or high costs. In short, the process has been simplified.

These converging factors make it easier to invest at low volumes and low cost, which is why the market of global investors has expanded so significantly over this period: The number of people using these apps grew from 35.6 million in 2017 to over 150 million in 2021.

What about ongoing growth?

Neo-brokers is the term for digital financial services that feature extremely cost-efficient IT structures, leading to near commission-free trading. This segment is projected to reach USD 2.9 billion in 2022 with an estimated 66 million users. And it’s not stopping there: Revenue is expected to hit an annual growth rate (CAGR 2022-2027) of 5.51 percent, resulting in USD 3.8 billion by 2027 and over 87 million users. The data shows that the market is not slowing, and this growth is not merely a trend or gimmick.

Revenue in Neo-brokers segment Worldwide
Source: Statista

Bigger companies are paving the way for the investing apps market, and the continued growth of this market is widely fueled by smaller companies entering the game that cater to different niches. As the investment app market matures, more companies will offer similar features at accessible price points, leading to a paradigm shift where new customers pivot to this booming market.

Investment Option

Moonshot Circle members are offered the exclusive opportunity to participate in the price movement of Public shares by purchasing a structured product (tracker certificate) that enables them to benefit from the company’s private growth stage. Moonshot invests in Public due to its valuation of USD 1.2 billion and an estimate of a 4-6x multiplier for Public equity investors over the next 2-4 years. The minimum ticket size for this investment is CHF 25'000.

Conclusion

So, does Public earn your trust as a potential investor?

The Better Business Bureau gives Public.com an “A” rating. The BBB rating system uses an A+ through F letter-grade scale for classifying businesses according to their quality. These grades represent BBB's degree of confidence that the business is operating in good faith and will resolve any customer concerns filed with the BBB.

For context around the stringency of this rating, Robinhood and Webull, which are considered as Public’s competitors, both have an "F" rating, meaning these businesses don’t have the trust of the BBB.

Public.com is an excellent app for young investors to start their investing journey. Using such an app is a huge step towards decreasing investing apathy to inspire a new generation of investors.