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American Stock Brokerage Startup, Public, Launches Services in the U.K.
Expanding Commission-Free Trading to the U.K.
American stock brokerage startup, Public, has expanded its services to the U.K. This marks the company's first international expansion since its launch in 2017. Backed by celebrities like Will Smith and Tony Hawk, the Public app will offer U.K. users commission-free trading in over 5,000 U.S.-listed stocks during regular trading hours.
Broadening Offerings and Unique Selling Points
Public plans to broaden its U.K. offering over time by including other asset classes such as ETFs, U.S. government bonds, and cryptoassets. Additionally, the company intends to launch an "investment plans" tool that allows users to customize recurring investments. In a congested market, Public differentiates itself from competitors in the U.K. by offering lower foreign exchange fees. While most competitors charge currency conversion fees on every trade, Public only charges fees on deposited money, resulting in significantly lower costs for users.
European Roots and Recent Milestones
Public has its roots in Europe, as it was founded in 2019 by Jannick Malling from Denmark and Leif Abraham from Germany. The platform, which allows users to build portfolios and invest in stocks and cryptocurrencies, reached over 1 million users in 2021. The company gained significant traction during the GameStop saga earlier this year, which brought attention to controversial practices in the industry. Public took proactive measures by removing Payment for Order Flow from its platform and adding safety labels to inform users of volatile or high-risk stocks.
A Partnership Approach to U.K. Expansion
Instead of applying for its own license, Public opted to partner with a regulated firm to provide its services in the U.K. This approach allows the company to quickly enter the market. Public will operate in the U.K. as an appointed representative of Khepri Advisers Limited, which is authorized and regulated by the Financial Conduct Authority.
Future Expansion and Financial Stability
While the U.K. is currently Public's main focus for international expansion, the company plans to leverage its learnings from this launch to expand into other European markets in the future. Public is in a strong financial position and does not face the same funding challenges as some of its competitors. With a healthy cash balance and a valuation of $1.2 billion, the company has no immediate need to raise funds. Higher interest rates have even brought additional benefits, allowing Public to earn yields on customer deposits and increase interest in assets like U.S. Treasurys.
Avoiding the Fate of Robinhood
Public aims to avoid the fate of its U.S. peer, Robinhood, which abandoned its U.K. operation in 2020. Public's co-CEO, Leif Abraham, believes that their business model is scalable and does not require massive infrastructure investments for market expansion. This lean approach positions Public for success as it enters new markets. While Robinhood does have plans to reenter the U.K. following its acquisition of cryptocurrency trading app Ziglu, Public is confident that its strategic approach will enable sustained growth in the U.K. and beyond.
Public's Expansion into the U.K. Foretells Success for New Businesses
Public's Strategic Approach Sets It Apart
Public's recent expansion into the U.K. showcases its ability to navigate international markets successfully. By offering commission-free trading, lower foreign exchange fees, and a diverse range of investment options, Public has positioned itself as a strong contender in the crowded U.K. brokerage industry. The company's lean business model, coupled with its proactive measures to address industry controversies, sets it apart from peers like Robinhood. Public's strategic approach is a testament to how new businesses can make a mark in competitive markets.
Evidence of Financial Stability and Expansion Potential
With a healthy cash balance and a valuation of $1.2 billion, Public has a solid financial footing and is not burdened by funding challenges faced by other competitors. The company's successful foray into the U.K. market serves as a launching pad for future expansion into other European markets. Public's aim to leverage its learnings from the U.K. launch demonstrates its ambition and potential for sustained growth. This success story reassures new businesses of how financial stability and calculated expansion plans can pave the way for long-term success.
Lessons from the Robinhood Debacle
Public's determination to avoid the fate of Robinhood, which withdrew from the U.K. market in 2020, highlights the importance of a robust and scalable business model. Public's founders understand that the key to success lies in adaptability, not relying on massive infrastructure investments. By prioritizing strategic partnerships, Public swiftly entered the U.K. market and is confident in its ability to sustain growth both in the U.K. and beyond. This serves as a valuable lesson for new businesses, emphasizing the need for agility and a cohesive business strategy when expanding into new territories.
A Bright Future for New Businesses in International Markets
Public's expansion into the U.K. signifies the potential for new businesses to make their mark in international markets. Backed by strong financials, a differentiated offering, and a focus on partnerships and scalability, Public exemplifies the path to success. As more startups seek to expand their footprint globally, they can draw inspiration from Public's journey. With the right approach, businesses can successfully enter new markets, build a strong customer base, and establish themselves as major contenders in their respective industries. Public's U.K. launch provides a beacon of hope, inspiring new businesses to pursue international expansion and seize opportunities for growth.
Article First Published at: https://www.cnbc.com/2023/07/13/us-brokerage-app-public-launches-in-the-uk-in-its-first-foray-overseas.html