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Robo investing is something that I have been very in favor of. Last year when robo investment app Acorns announced that it was going public via SPAC with Pacx, I invested a large percentage of my portfolio into it. I already feature Acorns on my investment referral page, and I wanted to own as much of the company as possible. Unfortunately, Acorns decided against going public via SPAC, and it is no longer merging with Pacx. Now, I am left with a ton of shares in a company that has nothing to do with Acorns.
This experience left me very annoyed and looking for a new way to invest in the robo investment world. This is when I got the opportunity to invest into Kevin O'Leary backed, robo investment company, Beanstox. Beanstox is a robo investment app where people spend 5 bucks a month to have their money invested for them into stocks and bonds. They recently raised money on Startengine (and still are). As a big fan of Kevin O'Leary and robo investing as a whole, I really wanted this to be a good investment for me, but unfortunately, it just didn't work for me.
There were several reasons why I didn't invest. Firstly, I think $5 a month is too high. I know that $5 doesn't seem like a lot at all, but it is. Acorns is $3 a month and is already more popular for one, and with a $5 a month charge and the fact that most people who use the app won't have much money invested, people would be paying a very large money management fee. I just don't see people willing to do this.
Secondly, Beanstox has very costly operating expenses. The reason Beanstox is raising money right now and has raised money so many times before is because running the company is expensive. They are spending money like crazy to keep this thing working, and this is why they are having to keep doing more rounds of funding.
Lastly, Beanstox has struggled to get members. Beanstox seems proud of its amount of members in its pitch to investors, but I think its numbers are alarming. Here is what Beanstox said, "Beanstox has grown to over 22,000 user accounts; 8,000 approved accounts; 1,400 clients subscribed at $5/month/client; monthly client growth rate is up 100% from 9/20 to 6/21 on limited marketing." The fact that 8,000 users got approved but only 1,400 joined is not good. Also, why has this app had such limited marketing? It's been out for awhile. Can they not afford it?
With all the above information in mind, one can see why I was shocked that they were raising money at a 27 million dollar evaluation.
I don't see this app succeeding, but I really hope that I am wrong.
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