It seems like every day there’s a new investment app on the market pitching itself as a better Robinhood; startups no one has ever heard of but which think they have a shot at changing investing as much as, if not more than, the fintech unicorn did.

Investing is a crowded market for new apps today. Fintech companies raised $40.5 billion across 1,895 venture capital fundraises in 2018, compared to $16.6 billion and 1,206 deals in 2015, according to CB Insights. Robinhood got a head start six years ago with its fresh, easy-to-use trading platform and a mission to democratize the financial system by not charging commission fees. But now, with the major brokerages dropping their own commission fees to zero, it’s a new era for rising competitors.

"The biggest innovation of Robinhood’s, which shouldn’t be discounted, is the fact that they went to zero-commission out of the gate and have been a pioneer of an actually disruptive business model," said Lindsay Davis, senior intelligence analyst at CB Insights. "Commissions back in the day used to be upwards of $20 to $25. When Robinhood came out with zero, brokerages recognized they needed to discount cause they would lose some of that volume."

Earlier this month Fidelity Investments, Charles Schwab, TD Ameritrade, E*Trade Financial, Ally Invest, and Interactive Brokers eliminated commission fees on online trades, losing a combined $20 billion of market cap, according to CB Insights.

"It’s a declaration of war almost, for some of these firms," said Merlin Rothfeld, investment strategist and instructor at Online Trading Academy.

It may have taken five years for the major investment houses to feel the threat of Robinhood’s model enough to follow its lead, but price was just the first wave of disruption in investing. Now young startups are competing on something else: actually democratizing the financial system.

"A lot of people are copying Robinhood in terms of pricing but to some extent they’re still missing the point," said Kerim Derhalli, founder and CEO of Invstr, a "fantasy finance" app for aspiring investors. "The issues that hold people back from investing are a lack of confidence, lack of knowledge, and lack of money. Those things keep people on the sidelines. There’s a huge untapped marketplace, which isn’t all of a sudden going to start investing because on the face of it, it's free."

Some 43 percent of people aged 25 to 34 are not investing their money, according to a survey by GOBankingRates.

Victor Jones, CEO of the investing app Dough, agreed, saying there’s a "wide open space for content, context, and service."

"Our belief is if we’re going to provide access to the markets it’s our responsibility to also add context," he said.

Robinhood recently rebuilt its newsfeed to help keep investors stay informed of the day’s market news and earlier this year it made its first acquisition, buying up the financial news podcast and newsletter MarketSnacks, which has been rebranded now to Robinhood Snacks.

Still, Jones isn’t deterred by Robinhood’s initial success and brand strength and hopes to capitalize on Dough’s second-mover advantage.

"MySpace was the first mover and in time, new services came up with better offerings," he said. "Bitcoin was a first mover but in time you’re seeing people adopt cryptocurrencies with new technology that meets their needs. There are many cases in past decades where new entrants come in with a better offering."

Robinhood declined to comment for this story.

Jannick Malling, co-CEO at Public, a social and fractional investing app that recently came out of stealth mode, said that despite most now operating a zero-commission model, cost is still a significant barrier to entry for new and less experienced investors and that education will become more of a requirement than a value-add.

"Buying into the stock market by buying full shares of stock in companies is very costly these days," he said. "When Robinhood came out, Amazon was trading at $300 per share and now the stock is almost $2,000. If you want to buy the top 15 stocks in the S&P 500 it’ll cost you $5,000 upfront. You don’t go at your own pace right now so the next wave will be more focused on education of the brokerage world and not just about the fees themselves."

Young investing apps serve as a good gateway drug to the financial market because they allow people who might only have $100 to get their feet wet in investing, Rothfeld said.

Pricing was just the first wave of disruption; the next battleground will be product. The increase in fintech app funding over the last four years created an environment that gave customers and investors choice, Jones said. As a result, he thinks new-age investors are more familiar with mobile-first brands like Robinhood than they are were the Schwabs and Fidelitys of the world.

For the startups, the opportunity in the space is still "massive," Davis said. They can bring more people, especially from the younger generations, into the market and give them access to investing ahead of when they would normally start

"Robinhood only has six million customers. That surpassed E*Trade, which has about five-and-a-half [million] — and it took them 35 years to do that," she said.

Now that startups and older brokerage houses alike are competing on a more even playing field on pricing, Robinhood and the post-Robinhood startups can refocus on the initial mission: to democratize access to investing. It’s a saturated market already for young startups, but it’s filled with opportunities — especially based on location and demographic, Davis said.

"The LatinX community, for example, might need access to financial services and be brought into the market by something that has more of a brand that resonates with them and speaks to them. We’re a brand-focused generation," she said.

"There are also opportunities in location, like agriculture and farming or trucking. The pain points in existence today aren’t being solved in a niche or targeted way so there is opportunity there, but it will take time and investment in product. The go-to market breakout success won't be had overnight."

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