Investing app Stash adds crypto offering, passes $125M in annual revenue • ProWellTech

The startup is taking its anti-trading, long-term approach to digital assets

Investing app Stashwhich last raised $125 million from investors in a Series G round last year, is adding crypto to the set of products it offers its 2 million users. The startup sees itself as different from competitors because of its focus on cultivating customers who are long-term investors rather than encouraging more frequent, riskier trading for short-term profits, Ed Robinson, Stash cofounder and president, told ProWellTech in an exclusive interview.

The company, valued at $1.4 billion during the Series G fundraise, also shared its latest annual revenue figure with ProWellTech, which Robinson said amounts to $125 million today. Deposits on the platform have grown 30% over the past year and it has nearly $3 billion in assets under management today, according to a spokesperson for the company. That’s up from an AUM of $1 billion in April 2020, according to previous ProWellTech reporting.

Stash’s new crypto offering Image Credits: Stash

For its crypto offering, the company is sticking with what Robinson calls a “curated” approach, allowing customers to buy and sell eight different cryptocurrencies on the platform — Bitcoin, Bitcoin Cash, Chainlink, Ethereum, Avalanche, Ethereum Classic, Solana and Uniswap.

“We’re not doing a wholesale approach of listing hundreds or thousands of cryptocurrencies on the platform. It’s this very small curated list with education and guardrails around it, and we believe that we’re offering to our customers the more established cryptocurrencies that have a longer-term use case associated with them,” Robinson said.

Robinson said the offering has been in the works for over a year and added that the company has no immediate plans to widen the list of digital currencies offered because it wants to maintain its focus on what it sees as high-quality assets. He contrasted Stash’s approach with that of other crypto investment platforms, saying:

“It’s not about making a quick buck off the transactional revenue … 80% of our revenue comes through the subscription fee of $3 a month or $9 a month.  In those tiers, you get access to all the investment products, personal retirement accounts for your kids, you get a banking product to get access to stock back rewards and you get life insurance.”

With Stash’s new crypto offering, customers won’t be able to store their own crypto in a wallet but will be able to buy and sell the assets 24/7, much like on an app like Coinbase, though chief investment officer Doug Feldman told ProWellTech that a crypto wallet launch is not necessarily out of the question in the future. For the time being, the company is partnering with Apex Crypto as its custodian.

“We believe in crypto. We believe in the underlying blockchain technology, and we see a future state — I don’t know if that future state is five years from now or 10 years from now or 20 years from now — with these technologies and the applications that are based on these technologies as ubiquitous in our everyday lives. So what we wanted to do is allow our customers to gain small exposure in a measured way to invest in crypto,” Feldman said.

As for the guardrails, the Stash app will show pop-ups to customers each time they attempt to make a crypto transaction, showing them what percent of their overall portfolio is at play. It will also make recommendations to customers about what percentage of crypto they should hold in their portfolios based on a risk tolerance survey they answer when joining the platform. Investors on Stash also will have to go through a mandatory training on the platform before interacting with crypto.

Feldman said that even for the most risk-tolerant investor on Stash, the maximum exposure to crypto the platform recommends is 6% of an investor’s overall portfolio.

“We understand it’s a volatile asset class. I cannot tell you if the crypto market is going to go down 20% in the next month … but we do have a firm belief that longer-term, [crypto] will be a large part of the ecosystem,” Feldman said. Having a small amount of crypto exposure, he added, will help Stash customers capture some of the asset class’s potential upside in the long term.

Feldman attributes the company’s recent growth to its long-term approach that discourages trading.

“We continue to grow, we continue to add subscribers, our revenue is the highest by a long margin has ever been. And that’s because we’re playing the long game with our customers,” Feldman said.