User:BC1278/sandbox/Robinhood
Company type | Financial Services |
---|---|
Founded | April 18, 2013 |
Founder | Vladimir Tenev (co-founder) Baiju Bhatt (co-founder) |
Headquarters | , |
Key people | Vladimir Tenev (co-founder) Baiju Bhatt (co-founder) |
Services | Stockbroker Electronic trading platform |
Subsidiaries | Robinhood Financial, LLC. Robinhood Crypto, LLC. Robinhood Securities, LLC. |
Website | www |
Robinhood Markets Inc, referenced informally as Robinhood, is a U.S.-based financial services company headquartered in Menlo Park, California.[1][2] The company offers a mobile app and website that allows people to invest in publicly traded companies listed on U.S. stock exchanges,[3] exchange-traded funds,[4] options[5] and cryptocurrencies[6] without paying a commission.
As of its latest funding round in May 2018, the company was valued at $5.6 billion.[7]
Operations
[edit]Robinhood operates a website and mobile apps for iPhone,[8] Apple Watch,[9] and Android.[10] The company has no storefront offices and operates entirely online. 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.[11]
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.[11][12]
Robinhood launched out of stealth and announced an initial $3 million in seed funding in December 2013. [13] While in private beta, fifty percent of users who made a trade used the app daily and 90% came back to the app weekly.[14] As of January 2015, while still in private beta, 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.[15]
The app officially launched no commission trading in March 2015, after having amassed a wait list of 800,000 people.[16]
As of February 2017, the company had executed over $30 billion in trades.[17] In April 2017, Robinhood raised $110 million at a $1.3 billion valuation led by Yuri Milner from DST Global,[18] and Greenoaks Capital and Thrive Capital.[19]
In August 2017, the company began offering free stocks in exchange for referring new users.[20]
The company's main source of revenue in 2017 came from interest earned on customers' cash balances and margin lending.[17][21] It later added a "Gold" subscription for a monthly fee, allowing people to borrow money for margin buying. And it earned rebates for directing order flow to broker dealers.[22] Bloomberg News reported in October 2018 that Robinhood receives almost half of its revenue from payment for order flow.[23]
As of January 2018, 78% of the firm's customers belonged to the demographic "millennials" (people between the ages of 23 and 38) and the average customer age was 31.[24]
On January 25, 2018, the company announced a waitlist for commission-free cryptocurrency trading.[25][26][27] As of 9:00PM on January 25, 2018 the wait list for enabling the feature grew to more than 1,250,000.[28] The next month, Robinhood began offering commission-free trading of Bitcoin and Ethereum to users in California, Massachusetts, Missouri, and Montana.[29] In May 2018, Robinhood expanded its Crypto trading platform to Wisconsin and New Mexico.[30] Robinhood's crypto trading platform was available in 30 states, as of June 2019. [31]
By February 2018, Robinhood had 3 million user accounts, around the same number as the online broker E-Trade.[32] Robinhood had grown to 6 million accounts, as of October 2018.[33]
On May 10, 2018, closed a $363 million Series D financing round led by DST Global.[34] As of May 2018[update], Robinhood had raised a total of $539 million in venture capital funding, with the last valuation at $5.6 billion, up from their previous evaluation of $1.3 billion.[34]
In September 2018, Seeking Alpha published a critique of the Robinhood platform's use of payment for order flow as the company's primary source of revenue.[35]
The company said in October 2018 it had started processing trades through its own clearing agency. By no longer paying fees to outside firms, it decreased its costs.[36]
In June 2018, it was reported that the company was in talks to obtain a US banking license, but Robinhood declined to comment on the matter.[37] In December Robinhood announced checking and savings accounts, with debit cards in partnership with Sutton Bank, to be available in early 2019.[38] Robinhood initially claimed the accounts would be SIPC insured, which the SIPC denied.[39] The products were rebranded as "cash management" the next day.[40] In December 2018, the waitlist and sign up page were removed from the app.[41]
References
[edit]- ^ a b Gannes, Liz (September 23, 2014). "With $13 Million, Robinhood Aims to Share the Stock-Trade Wealth". Recode.
- ^ "Robinhood lures digital coin traders from Coinbase with a free service". Digital Trends. February 22, 2018.
- ^ Constine, Josh (December 18, 2013). "Robinhood App Will Offer Zero-Commission Stock Trades Thanks To $3M Seed From Index And A16Z". TechCrunch.
- ^ Mohamed, Theron (2019-03-07). "Millennials are plowing money into these 6 ETFs | Markets Insider". markets.businessinsider.com. Retrieved 2019-07-17.
- ^ Chaparro, Frank. "Robinhood is launching a free options trading product for its users". Business Insider. Retrieved 2019-07-17.
- ^ Verhage, Julie (2018-01-25). "Robinhood Is Adding Cryptocurrency Trading". www.bloomberg.com. Retrieved 2019-07-17.
- ^ Lynley, Matthew (2018-05-10). "Free stock trading app Robinhood rockets to a $5.6B valuation with new funding round". TechCrunch. Archived from the original on 2019-04-11. Retrieved 2019-04-24.
- ^ WOHLSEN, MARCUS (11 December 2014). "Stock Trading for the Touch-ID Era Has Finally Arrived". Wired.
- ^ Tweedie, Steven (24 April 2015). "Best new Apple Watch apps I should download first". Business Insider.
- ^ "Robinhood stock trading comes to web with finance news for its 3M users – TechCrunch". techcrunch.com. Retrieved 2018-05-02.
- ^ a b Touryalai, Halah (26 February 2014). "Forget $10 Trades, Meet Robinhood: New Brokerage Targets Millennials With Little Cash". Forbes Magazine. Retrieved 26 September 2014.
- ^ 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.
- ^ Matherson, Nate (December 17, 2013). "Robinhood Opens Investing Doors to Wall Street's 'Hood". TheStreet.com.
- ^ Constine, Josh (September 23, 2014). "Robinhood Raises $13M To Democratize Stock Market With Zero-Commission Trading App". TechCrunch. AOL.
- ^ Huang, Daniel (January 6, 2015). "Young, Poor and Looking to Invest? Robinhood Is the App for That". Wall Street Journal.
- ^ Long, Heather (2015-03-12). "New Robinhood app offers free trading. Millennials jump in". CNNMoney. Retrieved 2019-07-17.
- ^ a b MORRISSEY, JANET (February 18, 2017). "With No Frills and No Commissions, Robinhood App Takes On Big Brokerages". New York Times.
- ^ McBride, Sarah (April 26, 2017). "Robinhood's Stock Trading App Is Valued at $1.3 Billion". Bloomberg News.
- ^ Irrera, Anna (April 26, 2017). "Trading startup Robinhood raises $110 million in new funding round". Reuters.
- ^ Constine, Josh (April 26, 2017). "Robinhood stock-trading app confirms $110M raise at $1.3B valuation". TechCrunch.
- ^ Kane, Logan. "Robinhood Is Making Millions Selling Out Their Millennial Customers To High-Frequency Traders". Seeking Alpha. Retrieved 13 February 2019.
- ^ Constitine, Josh (2017-04-26). "Robinhood stock-trading app confirms $110M raise at $1.3B valuation". TechCrunch. Retrieved 2019-07-17.
- ^ Foxman, Simone (October 16, 2018). "Robinhood Gets Almost Half Its Revenue in Controversial Bargain With High-Speed Traders". Bloomberg. Retrieved 18 January 2019.
- ^ Cheng, Evelyn (2018-01-25). "Stock trading app Robinhood to launch bitcoin, ethereum trading in five states". CNBC. Retrieved 2019-07-17.
- ^ Cheng, Evelyn (25 January 2018). "Stock trading app Robinhood to launch bitcoin, ethereum trading in five states". CNBC. Retrieved 25 January 2018.
- ^ John Roberts, Jeff (25 January 2018). "Robinhood, the Investing App for Millennials, to Add Bitcoin and Other Cryptocurrencies". Fortune. Retrieved 25 January 2018.
- ^ Perlstein, Sharone (2018-03-19). "Robinhood, the Microfinance giant bets on Bitcoin". Sharone Perlstein. Retrieved 2018-03-19.
- ^ "Invest in Bitcoin & other cryptocurrencies, 24/7 & commission-free". Robinhood. 25 January 2018.
- ^ "Robinhood Opens Cryptocurrency Trading". Bloomberg.com. 2018-02-22. Retrieved 2018-04-11.
- ^ "Robinhood's Crypto Trading Platform Expands to Wisconsin and New Mexico | Finance Magnates". Finance Magnates | Financial and business news. 2018-05-07. Retrieved 2018-05-17.
- ^ Obias, Rudie (2019-06-10). "How to save money: A step-by-step guide for millennials". Mashable. Retrieved 2019-07-22.
- ^ Chafkin, Max; Verhage, Julie (2018-02-08). "Brokerage App Robinhood Thinks Bitcoin Belongs in Your Retirement Plan". Bloomberg Businessweek. Retrieved 2018-02-09.
- ^ Constine, Josh (2018-10-10). "Robinhood cuts trading fees, grows profits with in-house clearing". TechCrunch. Retrieved 2019-07-22.
- ^ a b Lynley, Matthew (2018-05-10). "Free stock trading app Robinhood rockets to a $5.6B valuation with new funding round". TechCrunch. Archived from the original on 2019-04-11. Retrieved 2019-04-24.
- ^ Kane, Logan (10 September 2018). "Robinhood Is Making Millions Selling Out Their Millennial Customers To High-Frequency Traders". seekingalpha.com. Retrieved 14 June 2019.
- ^ Constine, John (2018-10-10). "Robinhood cuts trading fees, grows profits with in-house clearing". TechCrunch. Retrieved 2019-07-17.
- ^ "Robinhood in Talks With Regulators to Offer Bank Products". Bloomberg.com. Retrieved 2018-06-22.
- ^ Robinhood launches no-fee checking/savings with Mastercard & the most ATMs. TechCrunch. 13 December 2018.
- ^ Robinhood said to not be properly insured to offer checking & savings. TechCrunch. 14 December 2018.
- ^ A Letter From Our Founders. 14 December 2018.
- ^ Robinhood quietly stops users from signing up for cash accounts amid scrutiny from regulators. MarketWatch. 2 January 2019.