Robinhood has acquired a 4th round of funding since their launch in 2013. Their business model is fueled by commission-free, crypto-friendly trading for the masses and has a valuation now pushing over $5 Billion. Will they attract new cryptocurrency investors, or compete with existing exchanges?
Two guys who had built trading trading bots for Wall Street thought one day, the public should have this too. The big trading funds operate computerized trading software that makes trades constantly, yet they work free of charge. The creators of Robinhood simulate this trading frequency by sourcing the a crowd of users.
“At Robinhood, we’re guided by the belief that America’s financial system should work for everyone – not only the wealthy. Our platform has also grown significantly, reaching over four million users, cementing Robinhood Financial as the fastest-growing brokerage ever.”
Since 2013 they have been expanding their investing platform giving the everyday citizen a chance to invest in the best. They are still working out the kinks of differences with state laws. Their commission-free trading is only available in 10 U.S. states. That crowd of users has turned out to be overwhelmingly U.S. Millennials.
Exchange Competition
With huge support from that user base, Robinhood opened trading to cryptocurrencies earlier this year. Currently they only support 16 different cryptocurrencies, but that total will likely grow. Whereas other platforms began with cryptocurrencies and are now expanding, Robinhood has gone about their business model the other way.
They have no storefront offices and does not provide research reports or analytical tools on its platform. They are 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).
Cryptocurrency exchanges like Coinbase and Huboi and making huge changes to offer more services to attract institutional investors and opportunities to invest in early stage start-ups. However, Robinhood continues to build their business with the average consumer.
DST Global
This more recent funding round totaled $363 million from DST Global. The company was founded by Yuri Milner in 2009 with the sole purpose of making minority investments in the most significant and fast growing internet companies.
They have become one of the world leading technology investment firms with a track record of names such as Facebook, Twitter, WhatsApp, Snapchat, Airbnb, Spotify and Alibaba.