Robinhood:Buying A Stock As Quickly As

You’d Post An Instagram Photo

~Harshil Jhaveri
How Vlad Tenev and his cofounder, Baiju Bhatt, got nearly 1 million people to sign up for
Robinhood before the app even existed?

What it took to build a $5.6 billion company by the age of 30?

Here's how what started as a practical mistake turned into the world's fastest growing
brokerage and trading platform

What is Robinhood:

Robinhood is a U.S. based financial services company headquartered in Palo Alto, California
that started with the idea that a technology-driven brokerage could operate with significantly
less overhead.

They cut out the fat that makes other brokerages costly — hundreds of storefront locations
and manual account management.
Robinhood operates a mobile app that allows customers to buy and sell stocks on U.S.
exchanges commission-free.
To keep costs down, the company has no storefront offices and does not provide research
reports, analytical tools, or options trading on its platform.
[3]

The firm is a FINRA-approved broker-dealer, registered with the U.S. Securities and
[1]

Exchange Commission and is a member of the Securities Investor Protection

Corporation(SIPC). [6]

Robinhood Gold is a premium margin account, which increases buying power and gives
access to extended market trading, for a subscription paid monthly based on tiers.
Robinhood uses state-of-the-art security measures when handling the informationto make
sure that sensitive personal information is fully encrypted and securely stored.
Crypto-RobinHood’s Own Cryptocurrency Trading

One million users waitlisted for access in just the five days after Robinhood Crypto was
announced. Robinhood started rolling out its no-commission cryptocurrency trading feature
in California, Massachusetts,etc. Users there can buy and sell Bitcoin and Ethereum with no
extra fees, and everyone can track those and 14 other coins in its sleek app. That’s
compared to paying 1.5 to 4 percent fees in the U.S. on Coinbase

Robinhood sees giving away the service for free as a powerful play to gain users for its
existing service that lets people trade stocks, ETFs and options without additional charges.
Its stylish, retro-future Tron interface is also a super easy way to check on pricing and news
about 16 coins: Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Ripple, Ethereum Classic, Zcash,
Monero, Dash, Stellar, Qtum, Bitcoin Gold, OmiseGo, NEO, Lisk and Dogecoin

4 million users have transacted more than $100 billion to date, saving $1 billion in
commission fees.

On most stock trading services like E*Trade and Scottrade, customers pay around $7 per
trade to cover these companies’ marketing, physical branches and sales reps. Founded in
2013, Robinhood ditches those fees by running a lean operation centered around engineers
and its app. It makes money on the interest of cash its customers keep with it, or by selling
monthly Robinhood Gold subscriptions that let users borrow money to trade with.

That business has allowed the startup to raise $176 million, most recently at a $1.3 billion
valuation. And with its free crypto trading, it may have found a way to luring in a fresh class
of amateur investors.As crypto draws a new generation into the world of finance, Robinhood
wants to help them play the market, day or night.
How RobinHood Boosted Their Evaluation To 5.6 Billion USD

By adding a cryptocurrency exchange, a web version and stock option trading, Robinhood
has managed to quadruple its valuation in a year, according to a source familiar with a new
round the startup is raising. Robinhood is closing in on around $350 million in Series D
funding led by Russian firm DST Global,

The launch completed a trio of product debuts. The mobile app finally launched a website
version for tracking and trading stocks without a commission in November. In December it
opened options trading, making it a more robust alternative to brokers like E*Trade and
Scottrade. They often charge $7 or more per stock trade compared to zero with Robinhood,
but also give away features that are reserved for Robinhood’s premium Gold subscription
tier.

In effect, Robinhood has figured out how to make stock trading freemium. Rather than
charge per trade with bonus features included, Robinhood gives away the bare-bones trades
and charges for everything else. That could give it a steady, scalable business model akin to
Dropbox, which grew by offering small amounts of free storage and then charging for extras
and enterprise accounts. From a start with free trades, Robinhood could blossom into a hub
for your mobile finance life.

Partnering With Google Ventures-

When they launched the website and launched the service, they had closed their seed round
so that was about $3 million and it was led by Index, Google Ventures, Andreessen.With a
relatively newer concept,millions of users continuously signing up,the technology did catch
the attention of giants like Google. Those who prImarily invested in the company at that point
were making a big bet on the founding team, on Baiju and myself and on this idea that was
pretty unproven at the time of us actually being able to acquire customers organically
through word of mouth and actually deliver this product.

Words From The Founder:-

I think the biggest thing is to make sure that you understand the space super well and that
you're actually really, really passionate about it. I think there's a lot of people who come at it
from the business angle of, what's a market need? How do my skills align with this market
need? How much money can we make from this? But the process of actually building
something really, really big can take a really long time and I read somewhere that the vast
majority of value is created past year ten of a company's existence.

So if you think about all that happens between year zero and ten, if you're not really, really
passionate about something, I think it's very hard to keep going during that time period.