Latest Robinhood competitor All of Us launches, raises $3.5M
The success of Robinhood in shaking up the world of online retail investing (while reaching astronomical, beyond-unicorn valuation) has spawned a number of competitor sites and businesses, with the latest being the newly-launched All of Us Financial.
All of Us announced today that its trading platform is officially live via its website at www.allofusfinancial.com, as well as its mobile app on iOS and Android. The mobile- and web-based trading platform said that it delivers unprecedented transparency that empowers investors to achieve the kind of returns financial institutions have traditionally kept for themselves.
All of Us came out of stealth mode and announced its wait-list in September 2019, with the company onboarding traders since April 2020.
All of Us also said that it has raised $3.5 million in early seed money from founders, institutional and angel investors. That of course is a long way from Robinhood’s warchest. After raising $280 million earlier this month (at the height of the Covid-19 crisis, we’d note) at a valuation of over $8 billion, Robinhood has brought in more than $1 billion in financing since launching in 2014. However it doesn’t take long to look at that valuation and understand why investors and entrepreneurs are drawn to online trading – just a little success can mean the creation of a lot of shareholder value.
All of Us was founded by Alan Grujic, who spent time at TD Bank and Infinium Securities before becoming Managing Partner of algo-trading hedge fund shop Galiam Capital, and then Managing Director of family office Coherion Group.
It doesn’t look like All of US is shying away from Robinhood comparisons. Quite the opposite, actually. In the two blogs posted so far by Mr. Grujic on All of Us’s website, the name “Robinhood” appears no less than 25 times.
Robinhood shook up the online retail investing market in the US with its no-commission trading model. That forced the industry giants to capitulate with the likes of E*Trade, TD Ameritrade, Charles Schwab and Fidelity also ditching once lucrative per-trade fees.
So what makes All of Us different?
According to the company, “free trading” is made possible because brokers get paid when they send trades to be executed. All of Us shares that payment for order flow with the investor, which takes the industry a step forward from the standard zero commission-trading currently available. Because All of Us shares with its members, it says that it removes conflicts of interest.
Every All of Us member is enrolled in securities lending, providing an additional source of income depending on which stocks are held in the portfolio. As the All of Us platform grows, so will the revenue sharing potential from other innovative community products.
All of Us said that it is also the only trading platform to use a social component to its advantage. By ranking investors according to various performance criteria, All of Us introduces a level of gamification that is an additional motivation for investors while providing valuable data to share with community members.
Alan Grujic, founder and CEO of All of Us Financial said:
“The biggest misnomer from traditional online trading platforms is ‘free trading,’. Trading is never free. While the individual investor may not be asked to pay fees, the broker is still making money off each and every trade, without being fully transparent to their customers about how much they are making or where that money is coming from. This is the impetus behind All of Us and why we’ve focused so heavily on creating a business model that allows us to be transparent with each and every investor. At All of Us, we not only share with you how we make money, we share those profits with you.”