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Happy Saturday everyone. We have a metric Mountain of things to go through today. Below are notes on a fascinating start-up cycle in the mainstream fintech market, notes from the low-code world through an interview with Appian CEO Matt Calkins, and quick results on introductions. on the stock market, the Kidas venture capital cycle, a building and TVN. Let’s go!
How a startup is shaking up the retail boom
Robinhood took advantage of a wave of consumer interest to invest and trade to the public markets. Despite some recent setbacks, the company remains proof of the market’s interest not only in buying stocks, but also in more exotic option trades.
It is the latter that we are talking about today. AI options, a distributed startup linked to Chicago raised a funding round of $ 4.1 million. I’ve known the company for quite some time as I’m returning with a member of its founding team but haven’t had a chance to write much about it.
Now that he has raised capital from three main investors – Akuna Capital, Miami International Holdings and Optiver Principal Strategic Investments – and others, he fits into our mandate.
Essentially, the options are complicated, and many people approaching the variety of trading lack the toolkit and sophistication to make good choices when getting started. If you doubt me there ask your trading friends what their options strategy is. It will be an illustrative conversation.
Options AI has built a tool that allows traders to better see trades before executing them and making better choices when it comes to multileg options and the like. It’s quite a handy tool, and as someone who has long understood how options trading works and its price, it has helped me to understand.
But better mapping is only part of the reason AI Options caught my interest. The other reason is that it is charging for trades. The startup has a fixed trade cost of $ 5, which means it is swimming against the free trade push that Robinhood, Webull, and others have pursued in recent years.
Today, Options AI works with stock options, but told The Exchange it may add crypto and futures options in time. The company describes its current moment as popping its head out of where it built and tested, content that its initial pull and user data indicates it’s on to something. Certainly, its new investors agree.
A data point on options before you go. Why Are the major mainstream trading platforms so interested in options trading? Because it’s lucrative as hell. For example, options trading generated $ 64 million for Robinhood in the third quarter of 2021. Trading in stocks brought me $ 50 million. It’s a big deal.
And with flat-rate revenues and PFOFs, Options AI could be in a pretty attractive market position if it manages to attract enough people. Who is the target user of the startup? I am thinking of someone who has started trading but who wants a little more specialized tools. And Robinhood’s numbers indicate that there could be a number of those users.
More when we squeeze AI Options to trade growth data.
Shake up the SaaS price market
TechCrunch has primarily explored the SaaS pricing debate through the prism of subscription versus on demand Where usage based tariff schemes. This is a good window through which to view the evolution of the market, as many startups today are born as APIs for which on-demand pricing just makes more sense. And there is also some SaaS fatigue in the market.
Enter Appian, which does something a little different. I met the CEO of the company, Matt Calkins, this week after his company results call, expecting to discuss mainly the low-code market, process automation and process exploration. We’ve talked about these things – Appian operates a set of connected software that allows customers to leverage their processes for things to automate, helping them design and then automate to their needs – but we ended up talking about pricing.
Appian has implemented something called unlimited pricing, which is a kind of SaaS with an unlimited usage cap. SaaS is often billed per seat or per application, but Calkins et al. are trying something that feels like a mix of what’s good with SaaS and on-demand. Or put it simply, by charging a flat rate for one year of service and not limiting usage, the company is effectively challenging customers to use many of Appian’s services and get stuck with its platform.
Calkins has been unnaturally clear to a CEO of a public company that the unlimited plan can offer some clients what turns out to be a very good deal. Saying that he likes to “innovate” when it comes to pricing, Calkins argued that while his unlimited pricing model could lead a customer to create a bunch of things using Appian technology and perhaps pay less than that. what it could through a different pricing mechanism was just the cost of getting them to use its technology to the fullest.
At this point, Appian will have a long-term customer from which it can generate high margin revenue. Not a bad trade.
Summary of the IPO
Damn, we wanted IPOs and damn it didn’t they come. A roundup:
- HashiCorp has requested a release, our analysis of its numbers can be found here.
- AllBirds rated his DTC IPO above the range and then racked up more points when he started trading. Price notes here, financial coverage here.
- NerdWallet valued its mid-range IPO, before trading higher. He’s lost ground since, but still made a stellar debut. Financial coverage here and here. (And kudos to the old TechCruncher Felicia Shivakumar, who once took a photo of your current scribe while running a video show for TC and is a really good human, but now also works for NerdWallet!)
- Nubank has requested a release, our first look at some of its economics can be found here.
- The Bird SPAC case was concluded, and it did not have the better first day.
- And, finally, Backblaze set the first price scores for its own IPO, which we found fascinating given the company’s old-fashioned income scale.
- Kidas met my gaze this week, the startup is working with parents to help protect children in online play environments. She just raised $ 2 million, adding to her modest fundraising record. The company told The Exchange it “unlocks new information for parents that they otherwise wouldn’t have and it helps them better connect with their kids about something they love.”
- I will never be delighted about anything that gives the authority more control over the digital activities of underlings, but given the growing number of methods of communication in the game world, parents will want some oversight.
- Notably, the startup says its tooling doesn’t interfere with gameplay, so it doesn’t trigger anti-cheat software, which really, really Questions.
- More on the business later, but it’s based in Philly, which I dug up.
- The building becomes public: Not in our IPO section, but a startup that I passively followed called LEX Capital Markets just took a single public building. The company has a really neat model. Worth a look.
- And, finally, expanding our recent NFT coverage, Mythical just raised $ 150 million for its NFT infused game. Maybe that’s where the NFT wind is heading.