Long before Reddit’s WallStreetBets community took the financial world by storm, internet-savvy retail traders were huddling together in another cyberspace to hash out which stocks would potentially finance their early retirements.
That place was Stocktwits, and on Thursday the social-media platform for investors announced it raised $30 million. Valued at $210 million, it’s the latest firm to make bank on Reddit’s transformational year.
Riding Reddit’s Viral Coattails
New York-based Stocktwits was founded in 2008 because of an investment error. Cofounder Howard Lindzon passed on the opportunity to be an early investor in Twitter, but thought the social network would be a great place to discuss stocks and markets.
He and cofounder Soren Macbeth built Stocktwits using Twitter’s own programming interface, letting users follow each other and post about markets. They replaced Twitter’s famous hashtags with “cashtags” — a dollar sign followed by a ticker symbol (e.g. $AMZN for Amazon or $AAPL for Apple) — something Twitter itself adopted in 2012. But it was the meme-stock mania driven by Twitter rival Reddit that pushed Stocktwits to new heights this year:
- Stocktwits’ user base grew 50% to 6 million in 2021, including 1 million monthly active users, as online retail traders sought more places to track and talk about investor sentiment.
- The average Stocktwits user — more than 75% of which are male and under 45 — spends a whopping 30 minutes to 120 minutes every day on the platform.
Stocktwits — which makes money by selling data to financial firms — is using the new funding to expand its conversations, which already include stocks and cryptocurrencies, to NFTs and collectibles. It’s also planning international expansions to stock markets in India, Australia, the UK, Brazil, and Mexico.
Founder’s Double Dip: The global wealthtech market is expected to grow 14% annually, reaching $137 million in 2028, according to research firm Insight Partners. California-based Commonstock, a mobile app for stock traders, raised $25 million in October. Boston-based Zingeroo, which focuses on “healthy dialogue” instead of Reddit and Robinhood like meme mania, raised $8.5 million this week. Among Zingeroo’s investors is Lindzon himself.