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Zero-Fee Exchange Robinhood Losing Money; Plans To Go Public

Famous cryptocurrency exchange platform, Robinhood, is currently planning on launching its initial public offering (IPO) which will make the startup become a publicly traded and owned entity. The startup is also in search of a Chief Financial Officer as a significant part of its long-term projects. Robinhood’s co-founder, Baiju Bhatt stated at TechCrunch Disrupt that;

 “It’s something we think is very much in the future. Being a public company closely aligns with our mission.”

Robinhood has an estimate of about $5.6 billion in fundraising. This includes Sequoia, Google’s venture capital fund Capital G, DST Global and Iconiq. Baiju Bhatt reportedly stated on that in the “medium to long-term,” the company would also consider an Initial Public Offering (IPO). The company’s CEO Bhatt, while speaking on stage at the TechCrunch Disrupt conference in San Francisco, stated that;

 “It’s something we think is very much in the future. Being a public company closely aligns with our mission,” he further stated that; “Not in the immediate term, but it’s something we’re thinking about.”

Baiju Bhatt also regarded how urgent the company is in need of a CFO which is a part of its mission. It is worthy to note that the company is currently undergoing audits from the United States regulators.

The Robinhood Platform

Taking a closer look at the exchange firm, Robinhood started trading cryptocurrencies in February, in an attempt to generate more revenue from the beginning. The platform is a household name in the crypto ecosystem with over a million users in less than a week of trading which at press time stands at 5 million. The fundraising, which was conducted in May, has earned the company a second position in the list of most valuable Fintech conglomerates, it isn’t much of a surprise as the company prepares to launch IPO.
Though many people ask where Robinhood make their money from as they offer zero-trading. The answer is that the company still has about three revenue channels such as; interest on funds kept in its custody, sales of order flow to stock exchange needing more liquidity and also from its premium subscription. The company has also witnessed some form of expansion in recent months as they have welcomed more coins on its exchange platforms such as Etereum Classic, Dogecoin, Litecoin, and Bitcoin cash.
However, there seems to be some air of controversy around the company as there was a rumor that the company intends to develop its own wallet which was owing to the fact that company released an announcement showing that it needs specific blockchain engineers. Also, the company spoke about obtaining a banking license sometimes last week in a bid to become a banking service provider.

Robinhood Delves into Global Stock Competition

The Menlo Park, California-based start-up is popular for its zero-fee trading platform that rolled out about three years ago Robinhood Co-CEO is on a mission to add 250 global stocks which will be competing with giant firms like JPMorgan. The fact remains that the platform is mostly used by millennial age group (18-35) and offers ETFs, Options and the newly added crypto trading in February. The company has gone ahead of several rivals including E-Trade Financial with a total brokerage of 5 million.
Apparently, the company isn’t the only firm with user-friendly policies as the competition has drastically heightened in the brokerage industry because more no-fee options are joining the money market. J.P Morgan has also launched its own commission-free trading app in August this year. This further intensifies the price war going on in the market and might move to lower fees in retail brokerage.
Co-founder of Robinhood Vlad Tenev revealed in an interview which took place in August that the company might consider expansion even beyond stock-trading services, he said;

“We have an ambitious long-term vision to become a full-service financial services company over the next couple of years.”

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