In 2023, StartEngine found itself in a bind. The stimulus-fueled pandemic growth was starting to pull back, and in the first three quarters of the year their revenue shrank 21%.

As a pioneer in a new space, StartEngine had grown accustomed to trying new things. Many did not end up working (ie, collectibles) and were promptly shut down.

However, they struck gold in November of 2023, launching a new offering deemed StartEngine Private.

Instead of no-name startups with small followings and mostly modest revenues, StartEngine swam upstream to large, pre-IPO companies. They acquired stock in SpaceX, Open AI, and Perplexity from existing employees or early investors.

These companies had all the hype & traction to attract investors, and StartEngine gave its investor base access to these highly coveted companies.

In the process, they collected a roughly ~30% profit margin and 20% carry on any profits the equity generated.

StartEngine Private was a home run, and it quite literally transformed the trajectory of StartEngine’s business.

In the 1st half of 2023, the company reported a loss of -$5.6M on $9.8M of revenue.

With 2 years of ramping up Private, StartEngine’s 2025 1st half swung to a profit of $5.0M on $70.2M in revenue (616% growth). Private accounted for 84% of that revenue.

And to my knowledge, this largely doesn’t account for the 20% carry they are set to make on future sales/IPOs, etc.

One thing about the immense success, is that it attracts competitors. Either net new ones, or existing adjacent businesses looking for a new growth angle.

Wefunder now has a whole section of their site dedicated to pre-IPO companies, and Republic began minting mirror tokens (which I hate).

I had expected competition to come from players directly involved in crowdfunding, but as a StartEngine investor I became increasingly uneasy at the thought of a thousand-pound gorilla entering from the sidelines….

There may be no company that has better claim to ‘democratizing investing’ than Robinhood. The fintech darling burst onto the scene by allowing everyday consumers to invest in public stocks with no minimums or trading fees.

Its founder & CEO, Vlad Tenev, has laid out a vision for becoming a financial super-app; able to do anything financial in one centralized place.

This vision has picked up momentum - they’ve added cryptocurrency capabilities, a credit card, and retirement accounts to name a few.

My concern was that Robinhood would catch wind of how much of a money-maker StartEngine Private was, and seek to overtake StartEngine in the space.

You do not want Robinhood to compete with you, period. They’re really good at product, and they have an active member base that will use their products.

Coinbase is now seeing a contraction in market share after Robinhood’s crypto revenues surged 98% in 2025.

I believe that StartEngine may have avoided Robinhood’s expansion into private companies, for now. The main reason being that they’ve found their next cash cow, and it’s something entirely different: prediction markets.

Despite offering a limited number of prediction markets, Robinhood has seen an incredibly fast adoption of the product and crossed 4B in event contracts.

Piper Sandler estimated that revenues from Robinhood's event contract offering were annualizing at over $200 million in September.

This is going to be a major competitive threat for Polymarket, but StartEngine can breathe a sigh of relief, for now.

Robinhood has a lot of promising revenue streams that they are going to devote all their resources & time to - prediction markets, crypto, credit card, retirement, etc.

I would be a bit shocked if they strained themselves by entering the pre-IPO space, akin to what StartEngine is doing with Private. That’s not to say that Robinhood won’t do so 5 years from now, but I believe that StartEngine has bought itself some time in the immediate future.

And considering that Robinhood makes 100x of StartEngine’s net income, I’d welcome however much of a headstart StartEngine can get.

Disclosure: I own StartEngine equity, as well as Robinhood stock (250% gain in 6 months baby!)

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