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Investment startup Dough bags $20m to join fee-free trading race

Rick MorganbyRick Morgan
August 7, 2019
in Banking
Reading Time: 2 mins read
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Chicago-based investment app Dough is making a bet on customers who want to trade for free on their phones. On Tuesday, the company confirmed a $20 million funding round to expand its financial literacy program in advance of a mobile trading product in September. To this end, it’s debuted select videos on YouTube.

Dough wants to differentiate against app-based stock trading tools like Robinhood, Invstr, TD Ameritrade and Revolut through short educational videos and podcasts. The company is putting its message out on social platforms, including Twitter, Instagram and Facebook, and going after users who are intimidated by investing.

“We make jokes, even at our own expense. We’re not here to preach,” said Victor Jones, CEO of Dough, speaking about the tone of the messaging in its marketing materials. “We focus on helping investors grow their confidence and understanding of the news headlines.”

Dough will feature three types of educational tools: Dough Selects, in which users can pick interests like restaurants and video games and can view videos outlining the risks associated with those investments; Dough 3Cap, which will unpack the day’s market movements in short, three-minute news blurbs; and Social Currency, which will outline market trends for users. Customers can message employees from 7:30 a.m. to 5 p.m. Central Time if they have questions.

Dough will charge a flat, $1 monthly subscription fee, with a promotional free year to induce new users to join the wait list. According to Jones, Dough has no hidden fees, no minimum account requirements and no per-trade commission fees. Instead, it will generate revenue primarily through subscriptions, he said, but the company also will make money through interest on accounts, order rebates, debit balances and lending securities to investors for short-selling. Jones, who spent almost 12 years as the director of trading and operations at TD Ameritrade, said “thousands of people” have joined the wait list.

See also: Game on: Investment app Invstr uses Fantasy Finance to build young user base

The company has no plans to roll out banking features like checking and savings accounts, instead choosing to stay focused on the investing space. Tastytrade, a Chicago-based media company that focuses on investing news, was the sole investor in the $20 million round.

Dough isn’t the only investment platform turning to content marketing and education as customer acquisition drivers. Robinhood hosts a podcast that provides daily financial news, and TD Ameritrade offers its customers streaming video programs and articles to improve their understanding of the markets. Meanwhile, Invstr allows users to learn about the stock market through games and experiments with fictitious trading situations.

Tags: DoughPremiumrevolutRobinhoodSales & MarketingstartupsTD Ameritrade
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