Finance technology has been one of the more lucrative areas in the world of disruptive startups, with companies picking up billions of dollars in private investment; and, by Goldman Sachs’ estimates, on track to grab $4.7 trillion of revenues away from established financial players. Now, make way for one more new entrant hoping to make its mark in fintech.
Trading Ticket, a startup based out of New York, wants to develop a suite of products that will help consumers become more active, and proactive, investors. It has closed a $4 million seed round as it gears up to officially launch its first product, a mobile-friendly securities trading tool called Trade It.
While Trade It is just getting off the ground, the funding in Trading Ticket is notable in that it is coming from two key names in the fintech world: Valar Ventures, the investment fund started by PayPal co-founder and top VC Peter Thiel; and Citi Ventures, the investment arm of the Citi banking group. (Prior to this, the company had raised an undisclosed amount in angel funding from Newfund, and was largely bootstrapped it tells me.)
Trading Ticket’s three co-founders have equally notable backgrounds. CEO Nathan Richardson has led a number of finance and content businesses, including WayWire, Yahoo Finance, AOL and others. Serge Kreiker is formerly of Bloomberg, and Gaspard de Dreuzy is a co-founder and CEO of doctor house call app Pager. The latter two are also co-founders of Kapitall.
Trading Ticket has wide ambitions. The idea is to develop a series of mobile and desktop products covering all manner of financial transactions: apps to help people open accounts; access credit; place orders for shares and communicate with each other and their financial service providers.
Trade It, the first product, will focus on the third of these areas. It’s an API-based service that lets people place orders for trades instantly and securely directly on third-party sites, apps or Twitter.
It works by linking up mentions of a company name, ticker symbol or shortened URL with order tickets that connect with a users’ brokerage accounts, letting them place orders on the fly. It also will mark the first time that an ETF (exchange trading fund, or a marketable security that tracks an index, a bond, a commodity or a basket of assets) can be traded directly without the need to go through a registered investment adviser.
Trade It will make money in three ways, Richardson says: by way of transaction revenue and taking a fee per order; marketing sponsorships (essentially ad units that will run in the trading order ticket); and technology licensing fees.
Early partners for Trade It will include financial mobile apps Stock Tracker, Stocks Live, Rubicoin, and Invstr; and it’s also working with Benzinga, MarketWatch, The Motley Fool, TheStreet.com, VETR and ARK Invest for ETFs. Richardson says that the partnerships for the service will all be launching October 1. While the tech works both on desktop and mobile, to date, early usage of the service has seen some 80% of all orders placed via mobile devices.
Like e-commerce APIs that let you buy items directly from places where you are talking or reading about them online, the idea here is to bring the process of trading directly to the places where you are already going to read and act on business news. In a way, given Richardson’s background across both finance and content, it’s not really a surprise to see him working on a product that brings the two together.
“Trade It solves the three most difficult problems in mobile trading,” said Richardson in a statement. “Speed to trade for users, order volume for brokers, and a direct monetization opportunity for publishers who don’t want the conflict of becoming a broker-dealer.”
While there have been a lot of new services launched that take advantage of online and mobile innovations to cut down the time for certain financial services — online banking possibly being one of the most widely used — services focused on consumers and how they trade has seen relatively little development.
“Trading Ticket is the first financial technology company to integrate mobile trading seamlessly into online publishing platforms,” said Ramneek Gupta, Managing Director and Co-Head of investing at Citi Ventures, in a statement. “We’re excited to add them to our portfolio of investments that enable banking to come to the customer, empowering them to act anytime and anywhere.”
(More specifically, Richardson tells us that after a user registers with the service, Trade It does not hold credentials for desktop use. “We hold user name based on publisher preference,” he notes. To make the trade on desktop, users need to enter a password, the amount of the order and then confirm to place the order. On mobile, he notes that some apps will let users store their broker credentials on iOS using TouchID, but users will still need to enter the order, number of shares and confirm with TouchID.)
As part of the investment round, Andrew McCormack of Valar and DLJdirect founding CEO Blake Darcy are joining Trading Ticket’s board, with Gupta coming on as a board observer.
“Trading Ticket’s technology position, seasoned leadership team, and strong reception with both established and new financial services players is impressive,” said Valar’s Andrew McCormack in a statement. “We believe the global opportunity for integrated, mobile trading is very promising and Trade It is well positioned to capitalize on its most valuable areas.”