Shares, Europe’s first social and investing app, has closed a $40 million Series A funding round. The round was led by Peter Thiel’s Valar Ventures, Singular and Global Founders Capital and comes near the end of a highly successful first year for the company. In less than eleven months, Shares has raised $50 million in investment, grown to over 130 employees, and has now publicly launched its much-anticipated app.
While there are no shortage of investment apps and services available, Shares offers a unique take by integrating it with a high-quality social platform. While a big use will be to discuss investments, the app can just as easily be used for chatting or organising a night out. The unusual combination was one of the attractions for those investing. Valar Ventures’ Partner James Fitzgerald commented, “its unique take on investing and social combined with the incredible team they are building has given the company all the ingredients it needs to become a category leader.”
An idea born of personal experience
Co-founder and CEO Benjamin Chemla told TFN that the app came from his own experiences. Living in New York at the start of the pandemic he, like many, turned to social apps to keep in touch with friends and loved ones, but also to inform his investments.
“I spent time on Reddit and online platforms, looking for social signals, trying to gain some intuition for my investment decisions.” His discussions also included workarounds. “On Telegram and WhatsApp, we would send each other screenshots of our portfolios to exchange ideas,” he said. He eventually started looking for a platform that would help him and friends collaborate and share ideas, only to discover none existed.
While a social investing app might seem unusual, Chemla points out that in almost every other major life decision people involve their friends. From a new job, partner, or buying a house we gather opinions, but for investments, we frequently do the research and make the decision alone.
A full experience, however it is used
Chemla stresses that the platform is not just something with an add-on: “It’s a real trading platform, and a real social media platform. You don’t have to bounce between platforms.” They have also put a lot of thought into the social aspect, to protect it as a space for trusted friends. There are no followers, but instead requests have to be accepted, and group functions are limited to twenty people, to prevent it from becoming a broadcast medium.
“It’s a regulated platform,” Chemla explains. “Every user is verified through the know-your-customer process, so there are no avatars or fakes.” And the transparency means that people can see each other’s profiles, including aggregated performance, allowing users to judge whether that friend’s tip is any good based on their past performance.
Shares currently offers stocks and trades can be completed with just a few taps. With a £1 minimum and no-fee transactions, it also offers an accessible way for people to start trading.
EU-wide launch before summer
Shares has been eagerly anticipated, with over 60,000 people on the waitlist for the app. Now available to anyone, the company plans to spend the next few months focusing on the UK before it starts its growth internationally.
The main challenge, according to Chemla, are the regulatory hurdles, and they are planning well ahead to ensure they can expand rapidly. Applications to trade in the EU are well-progressed, with Chemla already building teams in several countries in anticipation of an EU-wide launch before summer, when he also hopes they will add crypto trading to the platform. They are also starting the processes to launch in Asia and Latin America in the longer term.
They have, inevitably, been affected by the Russian invasion of Ukraine, with three staff members in the country. Shares has been helping the staff stay safe, including helping one leave the country. However, with staff also in Russia and Belarus, the situation is one that will continue to have an impact on Shares.
Creating a new market
For Chemla, the most exciting thing is being at the forefront of a new wave of financial products. “This market hasn’t even started yet,” he told us, “we are at the beginning of a very big movement.”
For him, the innovation for this started in the US, with services offering commission-free trading days or fractional share purchases. However, since then, European companies have led the innovation, and Shares is the latest in this trend.
“We are trying to create a new category of platform that includes social covenants,” Chemla says, “it makes us different from anything that exists and will attract a lot of new investors.”