Industry Finance and Insurance Website robinhood.com Founded 2013 | Services Brokerage firm Headquarters Palo Alto | |
Key people Baiju Bhatt (Co-Founder)
Vladimir Tenev (Co-Founder)
Nate Rodland (COO) Launched April 18, 2013 in Palo Alto, California Profiles | ||
Robinhood Markets Inc. 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. It also provides margin lending, and cash management services.
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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 company has been criticized for poor customer service and delays.
The app has approximately 1 million users.
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).
The firm is the only brokerage that does not charge trading commissions for U.S. listed stocks and has no account minimum balance requirements.
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.
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.
Funding
Robinhood has raised a total of $66 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.