Robinhood: How the Fast-Growing Stock Trading App Got Into Crypto
The short overview of the second most valuable fintech startup in the U.S.
As been reported by TechCrunch Sept. 6, stock and cryptocurrency trading platform Robinhood is planning to launch an initial public offering. Now the company is looking for a chief financial officer (CFO). Robinhood CEO Baiju Bhatt added that the startup is undergoing a spate of audits from the U.S. Security and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) in order to ensure regulatory compliance.
After raising $363 million in a series D funding round and $110 million in a series C round, Robinhood was valued at $5.6 billion, making it the second most valuable fintech startup in the U.S. Currently, there are reportedly five million users conducting trades with cryptocurrencies on the Robinhood platform. Let’s recall the path of a mobile startup to the promising position it now occupies.
What Robinhood is and how it works
Dubbed by the press as a "trading app for millennials," before its involvement in crypto, Robinhood existed as a solely mobile application for stock trade. It had a plain and simple, user-friendly design, democratic deposit levels (i.e., aimed at under $1,000 users) and something much more revolutionary — a zero fee for trading the stocks. As the statement still goes on the official site main page:
“We believe that the financial system should work for the rest of us, not just the wealthy [...] We’ve cut the fat that makes other brokerages costly, like manual account management and hundreds of storefront locations, so we can offer zero commission trading.”
That came as a revelation for the users that didn’t want to be charged from $1 to $10 a trade just to pay for overhead. Although, the simplicity came with some limits to functionality: Users could not short sell or trade mutual funds, options or fixed income instruments. As Investopedia