Commonstock raises $25 million for social trading platform
Commonstock, a social trading platform, has raised $25 million in its Series A funding round that included investors like QED, Floodgate, Upside Ventures and others as well.
The platform was established in 2020 and it serves as a social media platform where traders talk about investing and trading. And to ensure that it is not just talk, the traders would be expected to link their trading account to the platform so that their real time trading data can be pulled and displayed on the platform to prove what the traders are actually capable of doing. It also has a Twitter like feed as well as user ranking which is expected to improve user experience and engagement. Traders can follow the other traders that they like and feel would help their trading and their combined assets under trading would be displayed for the trader that they are following.
“The ability for anybody to prove they own Tesla or Peloton by percentage, and show their skin in the game, weeds out a lot of the grifters who might say they had a 1,000% return,” Commonstock’s CEO and founder David McDonough said. “There’s no lying about it — you can see somebody’s performance in real time.”
The platform launched just before there was a spike in the retail user trading in the stock markets which followed the Gamestop meme stock saga. The platform was able to gain a lot of traction during this period which saw more and more retail traders entering the stock markets especially during the pandemic period when the trading and trade volumes were expected to be pretty low. But after a few months, this effect began to slow down and now we see that the trading volumes are much lesser, especially on the retail side and though many of the retail traders seem to be quiet at the moment, Commonstock has said that many retail traders have chosen to stick around the platform and they use the platform to follow better traders and educate themselves. The knowledge gained through the platform over the last year, by the retail traders who have been through the meme stock saga is likely to be imbibed by an entire generation of stock traders, the company said.
The company is just looking to increase the user base and engagement for now post which it is likely that like Facebook, Twitter and others, it might look to monetise user engagement and may also think about starting a subscription service.
