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Robinhood, a start-up stock trading company at no cost, has just completed its first acquisition. It is a millennium-centered media company called MarketSnacks.
This purchase may seem odd for the fintech giant valued at more than $ 5 billion, but that makes sense given Robinhood's growing willingness to become a one-stop shop for the needs of a young investor.
"We've improved market news coverage on our platform, added mobile discovery tools, and redeveloped our help center to better answer your questions," says Josh Elman, Robinhood's vice president of products, in a statement. blog post. "Robinhood Snacks is a major step in building these resources and helps you be more informed about market news."
MarketSnacks, a daily podcast and newsletter, focuses solely on finance and features a fun photo and humorous badysis of three to four news each morning. From now on, the newsletter will change its brand name to "Robinhood Snacks" and the "Snacks Daily" podcast by exposing the current user base of the company, which has more than 6 million users, as well as the general public. . MarketSnacks co-founders Nick Martell and Jack Kramer will join Robinhood as news editors and continue to produce daily news offers.
"Robinhood approached us and told us that their users were hungry for economic news that was easy to digest and accessible," said Martell. Fortune. "Robinhood has done a remarkable job in breaking down the barriers of financial services and products, but users still need good information to participate and be well informed."
Robinhood refused to disclose the terms of the agreement and did not provide growth indicators for the newsletter. MarketSnacks had "tens of thousands of subscribers" two years ago, during my last interview with the founders.
Founded in 2012, MarketSnacks began as a creative place outside of the full-time jobs of the founders on Wall Street. After the markets close, Martell and Kramer would exchange information on what they would include in the next morning's newsletter. They then divided the sections of the newsletter and edited it in turn.
I joined MarketSnacks for the first time in 2014 while working in a startup in New York. I was 22 years old and my boss recommended a few financial newsletters easy to understand. I rank squarely in the MarketSnacks target population because their average user is in their twenties, with 85% of their subscribers under the age of 36. About half of the readers of the newsletter are women. Robinhood has a somewhat complementary population, with its average user being 32 years old and 50% of its clientele being first-time investors.
The newsletter takes a light tone by addressing topics such as IPOs, acquisitions and quarterly results. The goal is to translate financial information to everyone, even if they do not work on Wall Street. For example, instead of saying that Chipotle lost his earnings, you would read something like, "Everyone has this friend who miserably chooses" burrito bowl "rather than" burrito. "Chipotle's latest winnings were like this friend . "
"We make what can be dry and boring really fun and easy to tell," said Kramer. "We think that humor is a great tool to make things memorable for people embarking on the financial world."
Last year, Martell and Kramer left their jobs to devote themselves to their full time business and raised funds of an undisclosed amount of rough draft ventures. They have also entered into subscription agreements with clients such as Fidelity Investments and have made appearances in the media on financial press briefings. Robinhood approached the founders this summer and sponsored the newsletter, which eventually resulted in an offer to buy.
"A central element here is that" Robinhood Snacks "will have editorial independence from the rest of Robinhood," said Martell. "We are committed to adhering to a set of editorial principles, in the image of any press company engaged."
I've already written about the troubled territory that tech companies have to navigate when they embark on the content business. Although Martell and Kramer insist that MarketSnacks will maintain its editorial independence from Robinhood, when the following scenario is presented, these lines become blurred. I asked: if Robinhood becomes public and the IPO does not go as well, how are you going to present the event in the newsletter? "The inherent conflict of interest in this case is so strong that we will not cover Robinhood at all, but we will cover everything else with editorial independence," said Kramer.
But an important distinction is that Robinhood does not launch a publication. It views the acquisition of MarketSnacks as a value proposition for current and future Robinhood customers. Subscribers to the newsletter do not need to be a Robinhood products.
The other interesting aspect of this transaction is that Robinhood will also pick up the MarketSnacks podcast, which offers a summary of the three biggest commercial successes of the day in 15 minutes. The news comes after Spotify bought podcasting startups Gimlet Media and Anchor for a total of $ 340 million.
"I think podcasting has a huge growth trajectory – commitment is nonsense," Martell said. "For us, this release demonstrates the power of combining the resources of a technology company with the confidence and value of a multimedia platform."
This article was originally published in Term Sheet, Fortune's newsletter on transactions and builders. Register here.
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