Robinhood Markets Inc., or simply Robinhood, is a U.S. based financial services company headquartered in Palo Alto, 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.
Video Robinhood (Company)
History
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. 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. As of March 2016, it had nearly one million customers.
As of August 9, 2017, the company began offering free stocks in exchange for referring new users.
As of early 2018, Robinhood had 3 million user accounts and this is approximately the same number as the online broker E-Trade.
Maps Robinhood (Company)
Current operations
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, Apple Watch, and Android.
Using the product requires a smartphone.
To keep costs down, the company has no storefront offices and does not provide research reports, analytical tools, or options trading 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).
Robinhood Gold is a premium margin account, which increases buying power and gives access to extended market trading, for a subscription paid monthly based on tiers.
Product launch
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. 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 2017, the company had executed over $30 billion in trades.
On January 25, 2018, the company announced a waitlist for commission free cryptocurrency trading. Immediately, users who enable the feature are able to track the price of Bitcoin, Ethereum, Ripple and 13 other cryptocurrencies. As of 9:00PM on January 25, 2018 the waitlist for enabling the feature grew to more than 1,250,000.
Funding
Robinhood has raised a total of $176 million in venture capital funding.
Robinhood received $3 million in seed capital from investors including Google Ventures, Andreessen Horowitz, Index Ventures, IT Ventures, Social Leverage, and Elefund.
Robinhood raised an additional $13 million in Series A funding in September 2014. Jan Hammer of Index Ventures led the round and joined the Robinhood board. 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.
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.
In April 2017, Robinhood announced they raised $110 million at a $1.3 billion valuation led by Yuri Milner from DST Global.
Criticism
The company has been criticized for poor customer service and delays.
See also
- Comparison of online brokerages in the United States
References
External links
- Official website
- Vladimir Tenev interview with Jason Calacanis at the LAUNCH Festival
- Robinhood (Company) at CrunchBase
Source of the article : Wikipedia
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