Lindzon Sees Place for SparkFin in Constellation of Mobile Fintechs
As a broker, trader, and hedge fund manager, Howard Lindzon has long been fascinated by the potential use of social media for collecting and sharing stock tips and related information.
He co-founded StockTwits in 2008 as an online social media network to share Wall Street market insights and ideas, and as a way to track market sentiment. As Lindzon once told me, “If I’m running an institutional trade desk, and following real-time streaming of news, then Twitter is going to rule the world.”
By 2013, though, Lindzon was thinking of ways to diversify beyond StockTwits—or as he puts it, “to create a constellation of mobile fintechs” for sharing information and ideas, and for stock-trading.
Lindzon’s ruminations led him to make seed-stage and Series A investments in Robinhood, a Palo Alto, CA-based startup with a mobile app that enables users to buy and sell stocks and exchange traded funds (ETFs) with no fees or commissions. Since then, Robinhood has raised a total of $66 million from venture investors, and now has about 1 million users.
At about the same time, Lindzon met entrepreneur Jason Pang at an elite, Silicon Valley networking event on Necker Island, the 74-acre island paradise that Sir Richard Branson owns in the British Virgin Islands. The idea that grew out of their conversations is Spark Finance and its free SparkFin mobile app. The social media startup enables users to create stock lists and to generate other investment ideas, and to share those ideas with their social networks.
Lindzon and Pang founded SparkFin last year, and are now closing a $1.5 million seed round to fund the startup’s operations through the beginning of next year. Investors include Lindzon’s Social Leverage fund, Joanne Wilson from Gotham Gal Ventures, Roger Ehrenberg, MATH ventures, and Anthemis Group, said Pang, an engineer and entrepreneur who is SparkFin’s CEO.
“It was the simplest concept,” said Pang, who was previously the founder and CEO of Carlsbad, CA-based Prima Cinema. “Instead of watching the news, reading the newspaper, and talking with your broker, the whole idea is to discover new investment ideas.”
Pang said he initially didn’t know much about financial technology, but that was OK with Lindzon. “Howard didn’t want somebody who understood fintech,” recalled Pang, who came to San Diego in 2000 as one of the first engineers at DivX. “I just like to build good products, and that’s why he wanted me.”
Perhaps more importantly, Pang said they didn’t want to create a typical “fintech” product.
“Nowadays, if you want to play in this ecosystem, you have to have this social aspect,” Pang said. He studied the way that companies like Spotify and Netflix organize their catalogs and user interfaces. With a focus on product design and user flow, Pang set out to make SparkFin’s mobile app equally fast, easy-to-browse, and curated. Users can create investment lists, or “decks,” based on technical, fundamental, and other filters—such as stocks held by billionaires—and publish or share their lists with their stock-trading social networks. Others can “swipe right” to save stocks they like onto their own watchlists, or “swipe left” to skip.
“On the surface, we’re building a simple stock app—a ‘Tinder for tickers,’” Pang said. “But it’s much deeper than that. We want you to be able to discover investment ideas, and to use those ideas to drive user engagement. So collaboration is key.”
SparkFin launched a beta version of its mobile app for iOS in October, and a version for the Android operating system is under development. With a small base of about 2,000 beta users, Pang said, SparkFin counted over 500,000 “swipes” in just over three months—or more than 25,000 swipes per week. Pang said generating revenue is not a priority at this time.
More recently, Pang says, a number of professional traders like Greg Harmon of Dragonfly Capital Management and Fusion IQ have begun using SparkFin’s app to share their stock picks and analyses with their newsletter subscribers.
“We want to pull in [financial] news and investor sentiment to help a whole new generation of investors,” Pang said. “We want this to become the de facto way to learn about markets and investing”—especially for the millennials who are more comfortable using a mobile app than a desktop application for buying and selling stocks.
While discount stock brokerage firms like Charles Schwab and TD Ameritrade also offer mobile trading apps to their customers, Pang said the discount brokers remain largely dependent on desktop applications for executing customers’ buy and sell orders. He also doesn’t view the discount brokers as competitors, because SparkFin is a mobile social-media app—not a mobile trading app.
As more and more applications go mobile, though, Lindzon and Pang said
they envision a constellation of specialized-but-related mobile apps. In fact, this is already happening with some of Lindzon’s other companies: StockTwits has been integrated with Robinhood, so that investors and traders who are exchanging tips on StockTwits can easily move to Robinhood to buy and sell stocks and ETFs.
Lindzon and Pang view StockTwits as a tool that’s best suited for professional and institutional traders to exchange stock tips and insights, while SparkFin is intended to serve more of a mass media audience as a key tool for sharing and learning information about stocks, ETFs, and markets. They anticipate that SparkFin eventually will tie into Robinhood, and perhaps integrate with online trading applications like Schwab and TD Ameritrade as well.
In a world where people are increasingly using their mobile phones to do things like file their taxes and book overnight accommodations, Linzon and Pang are betting they’ve set the right course for where fintech is headed.