Robinhood rockets to a $5.6B valuation with a massive new funding round(techcrunch.com)
techcrunch.com
Robinhood rockets to a $5.6B valuation with a massive new funding round
https://techcrunch.com/2018/05/10/robinhood-rockets-to-a-5-6b-valuation-with-a-massive-new-funding-round/
18 comments
I’ve yet to see any indication that people “gamble” (day trade) more when it’s free versus fee. Is this a fair criticism to level on Robinhood?
Besides, they have day-trading limits built into the app. It’s really just a mobile-first brokerage with extremely low net fees. And I’m grateful for it.
Besides, they have day-trading limits built into the app. It’s really just a mobile-first brokerage with extremely low net fees. And I’m grateful for it.
It was not aimed to be critical at all, just a comment on the attractiveness of the business.
Anecdotally, it definitely feels like it has broadened the base of the retail investor audience (which I think is a great thing) and if you have seen the options and crypto currency UIs it strikes similarities with fantasy football and makes those objects shinier.
Anecdotally, it definitely feels like it has broadened the base of the retail investor audience (which I think is a great thing) and if you have seen the options and crypto currency UIs it strikes similarities with fantasy football and makes those objects shinier.
I'm not a Robinhood user, so correct me if I'm wrong. But as someone who's used ~5 different online brokerages, I'm having a hard time understanding what innovation they brought to the table. Buying/selling stocks online is already pretty damn simple, and takes 1-2 minutes tops. Where exactly is the innovation here? "We're going to undercut the competition and save users a couple clicks" is now a $5B business idea? Kudos to the founders, but this hardly seems like the stuff movies are made of.
No commissions on any stocks or ETFs. No commissions is huge when you want to create a diversified portfolio, buying only a few shares of each at a time. No other brokerage has even come close to trying to provide this. Robinhood earned a lot of brand reputation with this move.
UX. Try out a few other brokerage experiences, and then try Robinhood, and you’ll see that the market was ripe for the taking for a team with design sensibilities.
UX. Try out a few other brokerage experiences, and then try Robinhood, and you’ll see that the market was ripe for the taking for a team with design sensibilities.
Robinhood has multiple (perceived or real) advantages: there are no trading fees or minimums; you can trade equities, options, and cryto-currencies; the app's UI is simple and intuitive; etcetera. Robinhood is doing the most to make trading accessible to masses, and from what I've read online, they're quite successful at doing so. Robinhood is the defacto trading platform for the younger generation.
Any broker can reduce trading fees to zero. How does Robinhood afford it?
Other brokers don't want to hurt their margins.
Etrade made 614 million in profit in 2017. 19% of revenue was from order commissions, or roughly 449 million. So Etrade could eliminate commissions and still remain profitable. https://en.wikipedia.org/wiki/E-Trade
Etrade made 614 million in profit in 2017. 19% of revenue was from order commissions, or roughly 449 million. So Etrade could eliminate commissions and still remain profitable. https://en.wikipedia.org/wiki/E-Trade
>> Robinhood rockets to a $5.6B valuation with a massive new funding round
They understand the mobile experience better than most brokerages, and they understand that mobile is where most users are spending their time.
IMO Interactive Brokers has a good mobile experience.
However, IB is decidedly not meant for the young, millennial, small amount of investment principal, getting started with investing/trading segment that Robinhood has carved out for itself.
So Robinhood's angle isn't just mobile first, it's mobile first for the segment of the population that expects such a product experience, who are going to grow their portfolios and trading activity in the coming decades.
However, IB is decidedly not meant for the young, millennial, small amount of investment principal, getting started with investing/trading segment that Robinhood has carved out for itself.
So Robinhood's angle isn't just mobile first, it's mobile first for the segment of the population that expects such a product experience, who are going to grow their portfolios and trading activity in the coming decades.
The thing about Robinhood is that it doesn't feel like a financial services company.
Their advantage is an ineffable quality.
The closest I can come to describing that feeling of using the service is it's like someone in your family made it for you.
This may sound strange, but there's a lot of love there. That level of attention to detail and quality is rare and apple-like.
Their advantage is an ineffable quality.
The closest I can come to describing that feeling of using the service is it's like someone in your family made it for you.
This may sound strange, but there's a lot of love there. That level of attention to detail and quality is rare and apple-like.
I found it amusing that Baiju Bhatt compared ill-informed investing encouraged by Robinhood to dropping your iPhone in the toilet.[1]
[1] http://fortune.com/2015/03/12/robinhood-investing-app/
[1] http://fortune.com/2015/03/12/robinhood-investing-app/
Oh, that's nice. Can it land on a barge?
A legal gambling app is definitely hugely valuable.
I truly mean to say this in the most positive angle possible. I think they are providing a valuable service and a great app, but it is a very nice business as well due to the above.
Kudos to the team.