People are obsessing over the markets in a way the world hasn’t seen since the dot-com craze two decades ago.
But how do people know which stocks to trade? Atom Finance, a startup that delivers markets-oriented information, is seeking to fill the knowledge gap. The company’s app supplies updates, analyst notes, and data tools for market junkies.
Think of it as Yahoo Finance on steroids.
Eric Shoykhet, Atom’s chief executive and cofounder, says he was frustrated with the limited set of financial analysis tools available to him a few years ago after leaving his gig as an analyst at Blackstone Group, the private equity goliath. The options were “super subpar,” he says, so he founded Atom.
Atom is riding a new wave of investor enthusiasm best exemplified by Robinhood, the app-based brokerage beloved by millennials that helped pioneer nixing stock trading fees. After Robinhood’s example, most brokerages—from Charles Schwab to Morgan Stanley’s E-Trade—slashed fees and found other ways to make money, including by lending out money lingering in accounts.
The industry-wide shift, coupled with unprecedented market volatility and economic uncertainty caused by the coronavirus pandemic, has bolstered a new stock market craze. Since the beginning of the year, the volume of U.S. equity trades attributable to retail investors has leapt to 23% from 13%, according to industry data.
Atom is betting that it too can capitalize on the recent trend: by selling subscriptions to enhanced analytical tooling. A premium version of the app, which debuted Tuesday morning, costs $10 per month. The paid edition offers the ability to view the extent of your individual share holdings across the totality of your fund holdings (how much exposure to Apple shares do you have across all your ETFs?), the ability to search through SEC filings for keywords (find: “COVID-19”), and the ability to export data to Microsoft Excel spreadsheets (for the armchair hedge funders).
Atom will have to compete with existing rivals. Most smartphones offer default stock-tracking apps. Robinhood makes information, news articles, and original editorial content available. People read posts on financial blogs like Seeking Alpha and the Motley Fool and chat across Twitter, Discord, Telegram, and elsewhere. More serious hobbyists use tools like Koyfin and Genuine Impact, while professionals rely on expensive Bloomberg Terminals.
Atom hopes to attract the middle ground: people who want more granularity and insight but who don’t want to shell out top dollar. CEO Shoykhet describes the core audience for the premium offering as “slightly more sophisticated retail investors and folks who were professionals but couldn’t afford to shell out $10,000 for a CapIQ subscription or $30,000 for Bloomberg Terminal.”
Investors are betting there is appetite as well. Greycroft, the New York-based venture capital firm, and General Catalyst, a Boston-based VC firm, have poured an additional $6 million into Atom on top of a $10.6 million round raised in December, following an earlier $2 million “seed” round. The cash injection brings Atom’s total funding to $18 million.
Shoykhet declined to disclose the company’s private valuation. Fortune estimates that it is, however, in the ballpark of $50 million, based on data available through Pitchbook, a private equity tracker.
Teddy Citrin, the Greycroft investor who led the deal, acknowledged the recent widespread explosion of interest in the stock market trading as contributing to the firm’s decision. “We are witnessing unprecedented levels of account creation in the retail investing space,” he told Fortune, adding that Atom is “democratizing” tools once reserved for institutional investors.
Shoykhet says he believes the market needs more quality information providers. Entrepreneurs and venture capitalists have focused “too much on the actual execution piece”—things like robo-advisers and wealth management software—”which we believe to be more of a commodity,” he says, adding that “there hasn’t been sufficient investment in tools and information.”
It will be up to Atom to muscle its way through the commotion of a frenzied trading floor.
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This story was originally featured on Fortune.com