|Power Score: 44.56||Momentum Score: 75.29 (T-2)||HQ: Chatham, NJ||CEO: Bob Cortright|
Valuation: $2.85 billion (+1,219% vs. last round, 2020)
Amt. Raised: $547.6 million
Lobbying Spend: No
Industry Orgs: No
Headcount: 209 (+130% YoY)
Engineering Headcount: 33 (+114% YoY)
Big Tech Experience: 2.4%
Open Roles: 7
R&D Spending: n/a
Patents Applied For: 0
Patents Owned: 0
Acquisitions: Cuttone & Company (January 2021)
If you search the app store, you won't find a DriveWealth app, but the company has been quietly powering the surge in retail investing over the past few years with its trading API. Though it looks a lot different than the other companies on this list in terms of business model and execution, and missed out on consumer recognition, DriveWealth has established itself as a solution that could disrupt traditional and new-age brokerages alike by leveraging the scale of its partners. It may not make headlines like Robinhood — which may be a good thing — but by powering all those partners' trades, it has become a behind-the-scenes retail investing powerhouse you can't discount.
With one foot in Wall Street and another in Silicon Valley, the company has grown exponentially of late, closing a $450 million series D funding round in late August less than a year after raising $56.7 million. Using big-name partners like Revolut, Cash App and MoneyLion, consumers might not even be aware they're taking advantage of DriveWealth's backend services since the company powers the in-app investing experiences for those companies natively. And while DriveWealth might miss out on consumer recognition because of that, it could scale very quickly with its B2B model. And, to some extent, it's shielded from investor pushback like the kind that came in the wake of trading halts on Robinhood in early 2021: Even when DriveWealth had a similar halt situation play out via its own trading mechanism, it was Robinhood that bore the brunt of the wrath of the Wall Street Bets crowd.
Upon closing its last funding round, CEO Bob Cortright noted that the company was seriously
considering an IPO. The company is also among the names reported to be in the running to be PayPal's partner on trading, as PayPal continues to build its super app. If successful, PayPal would be DriveWealth's largest partnership to date.
Robinhood isn't shy about its ambitions to become a global company. In its Q2 2021 earning call, Vlad Tenev stated: "due to improvements in our infrastructure, our staffing and our ability to handle the scale that we've seen, we feel well-positioned to turn some of our attention to international." Tenev added that the Robinhood value proposition could resonate "even more strongly overseas than in the U.S. where people by and large have access to reasonable quality financial tools." The biggest question for Robinhood is whether international expansion would result in the company getting stretched too thin, particularly in terms of regulatory compliance. On the other hand, overseas expansion could help Robinhood hedge against some regulatory risk in the U.S.
They Said It
"Embedded finance is the ability to work inside a financial services ecosystem, like digital wallet[s], and have all of these financial app products available at the flick of a finger … It's disrupting the way the markets have operated for a long time, allowing people to invest in a notional way with whatever they happen to have in their pocket." — CEO Bob Cortright in an August 2021 interview
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