Type of site
|Headquarters||Menlo Park, California|
|Key people||Vladimir Tenev (co-founder)|
Baiju Bhatt (co-founder)
|Industry||Finance and Insurance|
|Alexa rank||3,811 (January 2019[update])|
|Launched||April 18, 2013 in Palo Alto, California|
Robinhood Markets Inc., or simply Robinhood, is a U.S.-based financial services company headquartered in Menlo Park, California. 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. The company makes money from interest earned on customers' cash balances and margin lending.
After an April 2017 fundraising, Robinhood had a $1.3 billion valuation. The Wall Street Journal reported in 2018 that the company had closed another round of financing that valued the company at $5.6 billion.
In December 2013 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. Initially the firm had a waiting list, and in under 30 days there were 100,000 signups.[self-published source?] In mid-to-late February 2014, co-founders Baiju Bhatt and Vladimir Tenev were on CNBC and Bloomberg TV.
By September 2014, the waiting list had reached 500,000 people. 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.
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. Fifty percent of users who have made a trade use the app daily and 90% come back to the app weekly.
As of February 2017, the company had executed over $30 billion in trades. In April 2017, Robinhood announced they raised $110 million at a $1.3 billion valuation led by Yuri Milner from DST Global, and Greenoaks Capital and Thrive Capital, the venture capital firm founded by Josh Kushner, the brother of Jared Kushner (a senior adviser and son-in-law to U.S. President Donald Trump).
In August 2017, the company began offering free stocks in exchange for referring new users.
On January 25, 2018, the company announced a waitlist for commission-free cryptocurrency trading. As of 9:00PM on January 25, 2018 the waitlist for enabling the feature grew to more than 1,250,000. The month, Robinhood began offering commission-free trading of Bitcoin and Ethereum to users in California, Massachusetts, Missouri, and Montana. In May 2018, Robinhood expanded its Crypto trading platform to Wisconsin and New Mexico.
By February 2018, Robinhood had 3 million user accounts, around the same number as the online broker E-Trade. By April 2018 Robinhood had raised a total of $176 million in venture capital funding, with the last valuation at around $6 billion, up from their previous evaluation of $1.3 billion.
In June 2018, it was reported that the company was in talks to obtain a US banking license, with a spokesperson from the company claiming they were in "constructive" talks with the U.S. OCC. In December Robinhood announced checking and savings accounts, with debit cards in partnership with Sutton Bank, to be available in early 2019. Robinhood initially claimed the accounts would be SIPC insured, which the SIPC denied. The products were rebranded as "cash management" the next day.
The company has no storefront offices and does not provide research reports or analytical tools on its platform.
The firm is a FINRA-approved broker-dealer, registered with the U.S. Securities and Exchange Commission and is a member of the Securities Investor Protection Corporation-- SIPC)--(SIPC has not been approved as of 1-1-2019).
Bloomberg News reported in October 2018 that Robinhood receives more than half of its revenue from payment for order flow. The company later confirmed this on its corporate website when asked by CNBC.
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- A Letter From Our Founders. 14 December 2018.
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