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Robinhood Markets

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Robinhood Markets Inc.
Robinhood Logo.png
HeadquartersPalo Alto, California
Key peopleBaiju Bhatt (Co-Founder)
Vladimir Tenev (Co-Founder)
Nate Rodland (COO)
IndustryFinance and Insurance
ServicesBrokerage firm
Websitewww.robinhood.com
LaunchedApril 18, 2013 in Palo Alto, California

Robinhood Markets Inc., or simply Robinhood, is a U.S. based financial services company headquartered in Palo Alto, California.[1] The company offers the Robinhood smartphone mobile app, which allows individuals to invest in publicly traded companies and exchange-traded funds listed on U.S. stock exchanges without paying a commission.[2] The company makes money from interest earned on customers' cash balances and margin lending.[3]

After an April 2017 fundraising, Robinhood had a $1.3 billion valuation.[4]

Current operations[edit]

Robinhood operates a mobile app that allows customers to buy and sell stocks on U.S. exchanges commission-free. The app is available for iPhone,[5] Apple Watch,[6] and Android.[7]

Using the product requires a smartphone.[8]

To keep costs down, the company has no storefront offices and does not provide research reports, analytical tools, or options trading on its platform.[3]

The company has been criticized for poor customer service and delays.[3]

The app has approximately 2 million users.[3]

The firm is a FINRA-approved broker-dealer,[1] registered with the U.S. Securities and Exchange Commission and is a member of the Securities Investor Protection Corporation (SIPC).[9]

As of August 9, 2017, the company began offering free stocks in exchange for referring new users.[10]

History[edit]

The firm was founded by Vladimir Tenev and Baiju Bhatt who had previously built high-frequency trading platforms for financial institutions in New York City.[9][11] Tenev and Bhatt realized that high-frequency traders and electronic trading firms pay effectively nothing to execute trades. This inspired Tenev and Bhatt to bring existing technology to the retail brokerage market with Robinhood, a commission free stock brokerage.[12] As of March 2016, it had nearly one million customers.[13]

Product launch[edit]

Robinhood launched out of stealth on the crowdsourced technology news website Hacker News, leading to articles about the company in TechCrunch, PandoDaily, VentureBeat, TheStreet and others.[2][11][14][15] Initially the firm had a waiting list, and in under 30 days there were 100,000 signups.[16] In mid-to-late February 2014, co-founders Baiju Bhatt and Vladimir Tenev were on CNBC and Bloomberg TV.[17][18]

By September 2014, the waiting list had reached 500,000 people.[19] In March 2015, the company announced those still on the waitlist could create accounts and any U.S. residents, 18 and older, could apply for an account.[20]

As of January 2015, 80% of the firm's customers belonged to the demographic "millennials" (people between the ages 18 and 29) and the average customer age was 26.[21] Fifty percent of users who have made a trade use the app daily and 90% come back to the app weekly.[22]

As of 2017, the company had executed over $30 billion in trades.[3]

Funding[edit]

Robinhood has raised a total of $176 million in venture capital funding.[23]

Robinhood received $3 million in seed capital from investors including Google Ventures, Andreessen Horowitz, Index Ventures, IT Ventures, Social Leverage, and Elefund.[24]

Robinhood raised an additional $13 million in Series A funding in September 2014.[22] Jan Hammer of Index Ventures led the round and joined the Robinhood board.[22] Also joining the round were Ribbit Capital; Howard Lindzon, co-founder of StockTwits and general partner at Social Leverage; Aaron Levie, founder of Box; Dave Morin, founder of Path; Jared Leto; Snoop Dogg; and Nas of QueensBridge Venture Partners.[22]

Robinhood raised an additional $50 million in Series B funding in May 2015, led by New Enterprise Associates (NEA). Existing investors Index Ventures, Ribbit Capital and Social Leverage joined the round, along with new investor Vaizra Investments. As part of the financing, NEA General Partner Kittu Kolluri joined the Board of Directors.[25]

In April 2017, Robinhood announced they raised $110 million at a $1.3 billion valuation led by Yuri Milner from DST Global.[4]

See also[edit]

  • Comparison of online brokerages in the United States

References[edit]

  1. 1.0 1.1 Gannes, Liz (23 September 2014). "With $13 Million, Robinhood Aims to Share the Stock-Trade Wealth". Re/code. Re/code. Retrieved 26 September 2014.
  2. 2.0 2.1 Constine, Josh (December 18, 2013). "Robinhood App Will Offer Zero-Commission Stock Trades Thanks To $3M Seed From Index And A16Z". TechCrunch.
  3. 3.0 3.1 3.2 3.3 3.4 MORRISSEY, JANET (February 18, 2017). "With No Frills and No Commissions, Robinhood App Takes On Big Brokerages". New York Times.
  4. 4.0 4.1 https://www.bloomberg.com/news/articles/2017-04-26/robinhood-s-stock-trading-app-is-valued-at-1-3-billion
  5. WOHLSEN, MARCUS (11 December 2014). "Stock Trading for the Touch-ID Era Has Finally Arrived". Wired.
  6. Steven Tweedie (24 April 2015). "Best new Apple Watch apps I should download first". Business Insider.
  7. "Robinhood: At a Play Store near you". Under the Hood.
  8. Robinhood: Account Opening Requirements
  9. 9.0 9.1 Touryalai, Halah (26 February 2014). "Forget $10 Trades, Meet Robinhood: New Brokerage Targets Millennials With Little Cash". Forbes Magazine. Retrieved 26 September 2014.
  10. "Robinhood on Twitter". Twitter. August 9, 2017.
  11. 11.0 11.1 Carney, Michael (December 28, 2013). "Robinhood gets $3M to take from Wall St. and give to Main St. with its mobile-first, zero-commission brokerage". PandoDaily.com.
  12. "Robinhood: A Zero Commission Stock Brokerage". Bloomberg L.P. February 20, 2014.
  13. "Discount brokerages: Free trade: Share-trading joins the list of ostensibly free online services". The Economist. March 10, 2016. Retrieved 12 March 2016.
  14. Matherson, Nate (December 17, 2013). "Robinhood Opens Investing Doors to Wall Street's 'Hood". TheStreet.com.
  15. GRANT, REBECCA (December 28, 2013). "Robinhood's pitch to millennials: free stock trading". VentureBeat.com.
  16. "Robinhood on Twitter". Twitter.
  17. Navarro, Brian J. (February 27, 2014). "Robinhood, a new app, offers free stock trades". CNBC.
  18. "Robinhood: A Zero Commission Stock Brokerage". Bloomberg TV. February 20, 2014.
  19. WOHLSEN, MARCUS (23 September 2014). "New App Wants to Make Trading Stocks as Easy as Posting Selfies". Wired.
  20. Daniel Roberts (12 March 2015). "Robinhood, an investing app, is luring stock-market newbies". Fortune Magazine.
  21. HUANG, DANIEL (January 6, 2015). "Young, Poor and Looking to Invest? Robinhood Is the App for That". Wall Street Journal.
  22. 22.0 22.1 22.2 22.3 Constine, Josh (23 September 2014). "Robinhood Raises $13M To Democratize Stock Market With Zero-Commission Trading App". TechCrunch. AOL.
  23. https://www.crunchbase.com/organization/analyst#/entity
  24. Crunchbase: Robinhood
  25. "Onward". Robinhood. May 7, 2015.

External links[edit]

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