When former YouTube product manager Kevin Xu, known as “Sir Jack A Lot” on Reddit, turned $35,000 into $8 million trading stocks between 2020 and 2022, many people thought his fortune and investing style had reached its peak. peak, just like the memestock of 2021. the madness had.
However, Xu disagrees and is now building a startup for retail investors that aims to provide the good investment advice and community that people used to enjoy on platforms like the WallStreetBets subreddit, but with a level of liability that deters to the scammers. and scammers.
Launched in April 2022, AfterHour allows users to link to their stock brokerage accounts and, using the username of their choice, post their investments on a social network. “The only reason people trust me and Roaring Kitty is because we are transparent,” Xu told TechCrunch. “Why not show your real positions or show that you are really on to something? (AfterHour) regains a level of credibility and trust. Connect your brokerage and share screenshots and real verified positions.”
The company currently has more than 23,000 users, and while it's not a surprising number by any means, its user base is growing and early adopters seem dedicated: Xu said more than 70% of its users are on the app each year. . day. Currently, the company is focused on growth, Xu said, but has plans for how to monetize in the future.
“The game is Monday to Friday, 9:30 a.m. to 4 p.m.,” Xu said. “When we started, I was really afraid that it would be quiet on the weekends, but on Monday people just come back. “We don’t send fraudulent push notifications to get people to come back on Mondays, but they naturally come back.”
The startup recently raised a $4.5 million seed round led by Founders Fund (Keith Rabois' latest investment in the company) and General Catalyst. Pear VC, Daybreak Ventures, and F4 Fund, among several others, also participated. Xu said AfterHour is now focusing on growing its user base and team.
Xu believes that allowing users to be pseudonymous is why AfterHour's approach works. He recalled that he used to feel uncomfortable at the thought of talking to his YouTube colleagues about stock trading during his off hours, and he thinks he's probably not the only one who feels that way.
But on the other hand, he recognizes that an environment that encourages zero liability is not a good idea for a platform like his. That dynamic creates scammers and scammers like those seen on Reddit and
He added that because people can only post their real trades, it eliminates many bad actors. Of course, there will be some bad apples, but Xu said the startup works to monitor posts and flag anything suspicious with a system of warnings and community notes, not unlike x's community-based moderation approach.
Xu acknowledged that such a tracking system will not continue to be effective as the platform continues to grow. “Right now I'm basically the one on the app reminding people that independent thinking is sexy,” Xu joked. He added that the company is working on a plan to curb bad behavior and is thinking about ideas like an algorithm that can automatically flag posts that appear fake.
This deal caught my attention because I think it is a smart move to create services for retail investors. The trajectory of this space reminds me a lot of the crypto world. While very different, they are both areas of investing that had their 15 minutes of fame, but as they faded from the mainstream, they still maintained dedicated and growing communities of people interested in their approach.
Still, AfterHour is an especially smart idea because, as with cryptocurrencies, there's a lot of money to be made here, and a lot to lose. These platforms can't guarantee that their users will find financial success, but that doesn't mean average people should be completely excluded from the stock markets, which companies like Robinhood and, more recently, the Destiney tech 100, have worked to democratize.
“The big mistake in the valley was that retail was a fad in 2021, referring to the stimulus check,” Xu said. “It's just growing. The data backs it up.”
For context, 2023 was the most stocks-are-the-most-popular/?tpcc=NL_Marketing”>active year ever for retail trade. Robinhood made more than $86.6 billion in trading volume only in May.
AfterHour isn't the only company realizing the potential of this space; Robinhood's media expansion is a good example. The trading app bought retail investor-focused newsletter Snacks in 2019. More recently, it launched Sherwood Media, a financial publication aimed at the same audience.
While it is starting with the stock market, Xu hopes AfterHour will move into other areas of finance in the future to become the one-stop shop for retail investors in the future.
“AfterHour needs to exist,” Xu said. “I look at the Internet of finance and how it is evolving, and I am disappointed with all the other attempts (to build a similar platform). They were just disappointing.
I'm really thinking long term. I want it to be fun and accessible. I think it's more entertaining than sports and I think an increasing number of people online do it too.”
