Aussie entrepreneur Michael Giles has merged his start-up Roboinvest with an established US stock brokerage and will take the helm of the newly merged business, he has revealed.
Roboinvest has been acquired by Pennaluna & Company, an Idaho firm founded in 1926, with the aim of pushing the combined business to greater growth.
Giles, who is based in New York, only launched Roboinvest in January last year. The business works by allowing people to track the stock market moves of leading investors, thereby giving them the ability to make the same investments.
Roboinvest will now be rebranded within the group, with Giles taking overall control of a new holding company.
“Roboinvest was growing but we were not able to monetize it like I thought we should be,” Giles tells StartupSmart.
“It became apparent to me that in this business you need to be an online brokerage first and foremost, then have a social layer baked into the product. That’s the direction we are taking with Roboinvest.”
“Roboinvest will be rebranding and relaunching as an online brokerage leveraging off the infrastructure that powers the existing PennTrade business.”
“It will be a brand new community-driven trading platform unlike anything available today. We are going to be the new force in online brokerage.”
In October, Roboinvest raised $125,000 in funding from a selection of New York-based investors. The all-stock merger will see these investors given a slice of the newly-formed business.
“The Roboinvest product will basically be a start-up within a larger company, and we have other business lines in the pipeline, but we will not have the typical start-up problems,” says Giles.
“It is also somewhat of a turnaround situation, and as a contrarian I really enjoy that. It will keep me busy now that I am working on three businesses instead of one, but that’s the way I like it. Pennaluna & Company is my Berkshire Hathaway.”