Public appoints first independent board members, details 2021 user growth

This morning, Public, an investment app for the U.S. market, announced the appointment of two new board members. The startup also provided some details regarding its growth in the COVID era, a period that generated strong results for a number of services that allowed users to save and invest.

Public has added to its board Jessica Neal, former chief talent officer at Netflix and present-day venture partner at TCV, along with Christopher J. Brummer, a professor at Georgetown, member of the Fannie Mae board of directors, and adviser to Paradigm, a firm that invests in crypto-focused companies. (Paradigm recently made the news for taking part in a deal with Sequoia to invest in trading firm Citadel Securities.)

TechCrunch spoke with Public co-CEOs Leif Abraham and Jannick Malling about the board additions. Broadly, the two appointments align with Abraham's view of what his company focused on last year, namely scaling its business operations and its human capital. Neal fits neatly on the human side of that work, while Brummer's work on fintech and crypto regulatory matters slots him into the operational side of Public's business.

The savings and investing boom

TechCrunch spilled much ink covering the 2020 and 2021 savings and investing boom. Citizens of many countries turned to equities and crypto trading and investing services in droves as global savings rates rose and the markets proved more volatile than in previous years.

The trend was most commonly viewed through the lenses provided by Coinbase and Robinhood. Both went public in 2021, giving the market insight into their economics as well as how broad consumer demand is for crypto and equity investing and trading products. (Public has supported equities and crypto assets since last October.)

Public rode the same wave of consumer demand for financial management products and services, raising a mountain of capital in quick order. For example, it announced its $65 million Series C in December 2020, only to raise $220 million more in February 2021. Suddenly worth more than $1 billion, the new unicorn earned its place in our mental landscape of companies to track in the consumer fintech market.

Other firms mirrored Public's rapid-fire fundraising cadence. Chicago-based M1 Finance is a good example, having raised successive rounds last year as its assets under management, or AUM, scaled rapidly.

But while M1 was willing to share AUM numbers as it grew, and the fact that it was targeting a roughly 1% revenue result for each dollar it helped manage, Public is still conservative regarding what it will share on the growth front.

The company disclosed that it saw "funded accounts" grow by 700% last year. But on the revenue front, its CEOs were coyer, saying in a statement that their goals this year include "expanding [their] platform’s capabilities" in ways that will include "new areas of monetization."

That Public is being quieter about revenue than user growth is not a huge surprise. Recall that Public made the choice to stop collecting payment for order flow (PFOF) revenue last year, setting up a clear contrast to Robinhood's largest top-line generator. The company at the time said that it would instead accept tips from its users.

Public's strong fundraising history gave it the room to avoid a monetization focus last year, but 2022 will likely become a proving ground for the company to build out its revenue model. In conversation with TechCrunch, Abraham and Malling were clear that they were content with their choice to not collect PFOF incomes. Why? In their view, transactional revenue streams are inherently volatile, and because they want to position Public as more of an investing application than a trading platform, collecting incomes based on the pace at which users bought and sold securities was a bit counter to their ethos.

Still, the company is a business, and one with material aspirations. The CEOs are bullish on the scale of their market -- that Public has a big TAM, to use venture-speak -- implying that their choice to focus on building out community features and scaling their company's technology will bear fruit as it onboards more users.

On that front, one of the more interesting facts about Public is that its customer acquisition is about half organic. And the company said that it wasn't seeing its customer acquisition costs rise as it grew. That fact grants credence to the idea that there are still Americans in the market for an investing and trading home.

TechCrunch asked how horizontal the company will go, given that many fintech products with a consumer focus wind up working to become financial super apps. Public's leaders said that they don't want to build a bank.

So Public is sticking to its guns, focusing on building a community-focused investing service. Let's see how it works to grow its revenue per user this year now that it has attracted an audience of users at scale.