Robinhood helped inspire a new generation of investors to enter the stock market Now that investing is cool again, upstarts like Staax are finding new ways to cash in on its cachet.
The founder and CEO of Staax noticed the lack of resources available to aspiring investors who wanted to get comfortable with the process.
When I looked at my friend group, who was still shy to invest or didn't know where to start, I saw a huge difference. Varanasi said that there are still a lot of barriers for beginners to get into the stock market.
She wanted to gift her friends shares of stock so that they could start investing. She said that the barriers to investing are usually logistical. There are a number of steps that need to be taken in order to invest money after someone is paid.
It takes over a week to transfer from Venmo to your bank. Varanasi said that a lot of people just leave their money in there and don't invest it.
Varanasi decided to build her own platform after realizing there wasn't an existing one that could help her send stocks directly to her friends. Staax is the result of her efforts with her two co-founding partners.
Users who open an investment account with Staax are treated like a full-service broker. Varanasi explained that they can buy and sell shares the same way they can on Fidelity. Staax allows for peer-to- peer payments in stock.
The CEO and founder of Staax pitches as part of a startup competition in San Francisco. The image was created by Haje Kamps.
Varanasi believes that payments haven't had a lot of evolution in the last 10 years.
Users who sign up for Staax link their new account to their bank account and make a list of their top five preferred stocks. A feature that lets a recipient choose if and when to accept a stock gift is also included.
The platform handles stock price movements between when the shares are sent and when the recipient accepts them She explained that the sender could give someone a share of the money in the form of cash. If that share went up in price to $12, the recipient could either accept the gift and pay the extra $2 out of their own bank account, or they could choose to take the $10 in cash.
The system helps senders avoid having to purchase stock and sell it in order to send it to the recipient in cash.
Varanasi said that Staax uses a ledger system that uses cash on the back end to avoid taxes for senders.
The main use cases for Staax are social, such as a friend paying back another friend for buying them coffee, but doing so in stock instead of cash.
Staax's co-founding members are:Nikki Varanasi, Lucy Yang and Victoria Yang. Staax is the image's credit.
It isn't large amounts of money you need to stress about, but it accumulates over time. Varanasi said that as an investor you are in it for the long term.
The company has raised $2 million in pre-seed funding since it was founded. Techstars, Western Union, Lightspeed, Harlem Capital and Hustle Fund are among the investors.
Varanasi said that taking payment for order flow from market makers who execute trades for other companies is a likely candidate. The process of making money while keeping its product free for users has drawn scrutiny from both customers and regulators.
Varanasi said she doesn't worry about the ban in the U.S. because regulators haven't cracked down on it. She drew a distinction between Staax and the implementation of the same system.
Varanasi said that they are exploring ways to make revenue on the back end through the trades, but in the most ethical way.
Staax is considering charging some users a fee for premium content from creators who partner with the startup as well as potential B2B partnerships down the line.
Staax needs to build community in order to get users to use the app.
Varanasi said that the company has a waitlist of 12,000 people that it has built through marketing efforts tailored to Gen Z, including events on college campuses.
Staax is doing a great job of making investing more mainstream. Varanasi said it was similar to investing into lifestyle.
You don't save your money up every quarter, you take a few thousand dollars from your paycheck and invest it on the stock market. Every time you go out or get paid back, you invest $5 or $10 a week.
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