Millennial-focused share trading platform Superhero says it\u2019s not a clone of the popular but controversial US app Robinhood, insisting it is subject to far more stringent regulation than its overseas peer.<\/p>\n
Superhero, which launched in September last year, has secured $25 million in funding from billionaire Alex Waislitz\u2019s Thorney Investment Group, Phil King\u2019s Regal Funds Management, Afterpay co-founder Nick Molnar, Zip co-founder Larry Diamond and Finder co-founder Fred Schebesta.<\/p>\n
The latest funding round values the fledgling startup at more than $100 million and Superhero, just like Robinhood, is tapping into the surge in retail investors into the market, which fuelled the GameStop short selling frenzy in the United States.<\/p>\n
<\/p>\n
Wayne Baskin (left) and John Winters (right) launched share trading platform Superhero in September last year. <\/span>Credit:<\/span>Rhett Wyman<\/cite><\/p>\n Robinhood played a key part in helping Reddit posters buy GameStop stock, driving up its price, but then controversially moved to restrict their purchase to contain market volatility. With the episode highlighting the power trading apps can exert in distorting the financial markets, Superhero\u2019s co-founder and chief executive John Winters said while the platform was built to remove barriers to sharemarket investing it wasn\u2019t looking to be a clone of Robinhood.<\/p>\n \u201cWe have been compared to them but Superhero is a very different business and the Australian market is a very different market as well,\u201d he said. \u201cPeople have said our offshore competitors may not be acting in the best interests of their customers, where in Australia there\u2019s a lot more regulation that ensures customer security and their best interest are always put first.\u201d<\/p>\n Superhero charges a flat fee of $5 per trade and a minimum investment of $100. Mr Winters said the platform doesn\u2019t provide leverage to its users, so they have to pre-fund their trading account and cannot invest more than they have.<\/p>\n \u201cIf you put $1000 into your account you can only invest $1000, where with a margin facility you put $1000 and you can invest $10,000,\u201d he said. \u201dSo you can lose significantly more than you started with.\u201c<\/p>\n He also pointed out that trading platforms in Australia have to pay the Australian Securities Exchange, in stark contrast to the selling of order flow in the US, where platforms get paid to trade with an exchange.<\/p>\n Superhero has also been careful to steer clear of the \u201cgamification of investment\u201d through features such as emojis and confetti blasts on completion of trades.<\/p>\n \u201cInvestment should be easy, the user interface should be easy to use, but it\u2019s not a game and we don\u2019t want to celebrate investing in shares,\u201d Mr Baskin said. \u201cThere\u2019s risk involved and if it becomes too much like a game people forget that it\u2019s real money.\u201d<\/p>\n Nevertheless, the rapid influx of retail investors moving into the market is benefiting Superhero, which has signed up over 57,000 customers since launch.<\/p>\n Backed with fresh funds from its roster of heavyweight investors, Superhero is also launching a superannuation product that lets users select Australian shares and exchange-traded funds to invest their super in. It also has its sights set on an initial public offering in the next 12 to 18 months.<\/p>\n \u201dThis rise of retail investors that are sourcing their information via social platforms which no one has ever seen before, it\u2019s turned the finance world almost on its head,\u201d Mr Winters said.<\/p>\n He said the move away from investment banks or market commentators for information to other retail investors on social media platforms such as Reddit was \u201cprobably here to stay\u201d but warned investors to consider whether the information they were getting on social media was wholesome enough to make investment decisions.<\/p>\n Start the day with major stories, exclusive coverage and expert opinion from our leading business journalists delivered to your inbox. Sign up here.<\/p>\nBusiness Briefing<\/h3>\n
Most Viewed in Business<\/h2>\n
From our partners<\/h3>\n