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Everyone, happy Saturday. Today we have a mountain of tasks to complete. Below are notes about a fascinating round of consumer fintech startups. You'll also find notes from the low-code world, thanks to an earnings interview with Appian CEO Matt Calkins. Also, quick hits on IPOs and Kidas venture capital round. Let's get started!
One startup shakes up the consumer trading boom
Robinhood was able to ride a wave of consumer interest and trade all the way up to the public markets. Despite recent setbacks the company still shows how much there is interest in the market to not only buy stocks, but also trade more exotic options.
Today we are focusing on the latter. Options AI, a distributed startup that has Chicago connections, has raised $4.1 million in Seed funding. Although I have known the company since its inception, I have not had the opportunity to write about it.
It has now raised capital from Akuna Capital and Miami International Holdings, as well as other investors. This fits in our remit.
Options are complex, and most people who approach trading have limited knowledge and tools to make informed decisions. Ask your trading friends for their options strategy if you have doubts. This will make for a great conversation.
Options AI has created a tool that lets traders see trades before they are executed and makes better decisions when it comes to multileg options. This tool is very useful and I was able to understand it even though I had only a vague understanding of options trading and how prices work.
Options AI is not just about better charting. Another reason it charges for trades is the fact that it does not charge for them. It charges $5 per trade, which is a steep increase from Robinhood's free-trading model that Webull, Webull, and others have been pushing in recent years.
Today Options AI is able to work with equity options, but The Exchange was informed that it could add futures and crypto options at some point. According to the company, its moment is when it looks back at what it has been doing and how it has been testing. Its early traction and user data suggest that they are onto something. Its new investors are certain to agree.
Before we go, a data point about options. Options trading is so popular among major consumer trading platforms. It is extremely lucrative. Robinhood generated $64 million in options trading during the third quarter 2021. My $50 million was earned from equity trading. It's a huge business.
Options AI's flat-fee model and PFOF revenues could make it a very attractive option if enough people sign up. Who are the startup's target users? Someone who is interested in trading, but needs specialized tools. Robinhood's numbers suggest that there may be quite a few such users.
We squeeze Options AI to trade growth data.
The SaaS pricing market is being re-evaluated
Mostly TechCrunch examined the SaaS pricing issue through the lense of subscription versus usage-based or on-demand pricing. This provides a great window into market evolution, as many startups are today born as APIs. On-demand pricing makes more sense. There is also some SaaS fatigue in the market.
Appian is doing something different. After Matt Calkins' earnings call this week, I met up with Matt Calkins, the CEO of Appian, to talk about low-code markets, process automation, and process mining. Appian offers a set of connected software that allows customers the ability to analyze their processes and find things they can automate. We also discussed design and automation. But, we ended up talking about pricing.
Appian created unlimited pricing, which is a type of SaaS that has an uncapped limit on usage. SaaS is usually priced per seat or per app, but Calkins and co. Calkins et al. are trying to combine the best of both SaaS with on-demand. The company charges a flat fee for a year of service, but does not limit use. This allows customers to take advantage of Appians services and get involved with the platform.
Calkins, a CEO of a public company, was not naturally clear that the unlimited plan might offer customers what may work out to be a very good deal. Calkins stated that he is a proponent of pricing innovation and that the unlimited pricing model could allow customers to build a lot of stuff with Appian tech, but that it would not make them pay less if they used a different pricing system. It was simply a cost to get them to use its tech.
Appian will then have a long-term customer from which it can generate high-margin top lines. This is a good trade.
IPO Roundup
We wanted IPOs, and they have not come. A roundup:
Various, sundry
Kidas was a startup that works with parents to keep their children safe online. The company just raised $2million, which is an increase to its modest fundraising record. The company explained to The Exchange that it provides parents with new information, which allows them to connect better with their children over something they are passionate about.
While I won't be excited about any authority that has more control over digital activities of my subordinates, the growing number of communication methods in the gaming industry will make it clear that parents are going to need some oversight.
The startup claims that its tooling does not interfere with gameplay and therefore doesn't trigger anti-cheat programs. This is really important.
More information on the company will follow, but it is based in Philly which I discovered.
Building goes public: This is not in our IPO section. But LEX Capital Markets, a startup that I've been passively following, just made a single building publicly. This company has a very interesting model. It's worth a look.
Finally, Mythical has raised $150 million to fund its NFT-infused gaming game. Maybe that's where the NFT wind is going.
Alex
