Since 2013, the startup is working on a trading application without brokerage fees, to make available to the exchange.
In Menlo Park, in the San Francisco bay, Robinhood continues to grow and attract the best profiles of the Silicon Valley. Since 2013, the startup grows and grows and will soon surpass the level of $ 10 billion valuation. Its growth, it is due to his desire to make more accessible the financial markets : in the manner of the myth of Robin hood, Robinhood aims to democratise an industry previously reserved for the wealthy.
In seven years, fintech has entertained. She offers to buy and sell shares like bonds, but also of the crypto-currencies such as Bitcoin, Ethereum, or even Litecoin. In the context of an investment cycle in the F-Series, a new turn table just allow the startup to raise $ 320 million. Now, its valuation has reached $ 8.6 billion.
Period of high activity and attractiveness
This last round table, the result of an operation carried out last may during which Robinhood raised $ 280 million from Sequoia Capital. The new investors in this month of July are the venture capital companies TSG Consumer Partners and IVP. They were particularly motivated by the real surge in the stock market during the health crisis.
As a reminder, the result of a “black Monday” in early march, some titles – notably in the tech – saw their share prices jump to levels never achieved. In a recent interview with Benoit Grisoni, the CEO of Boursorama at Presse-citron, we could learn that the bank in the French line had experienced a strong increase in the number of users of its trading platform. ” We broke the record on the number of openings of securities accounts and PEA – with more than 25,000 openings on the month of march – but also on the volume of orders, which was 3 times higher than the normal one-month “ mentions it.
A model close to the banking institutions
Despite its growth, the model of Robinhood is still very unclear and many professionals wonder about its future. The fintech operates on a market which is highly regulated, and in contrast to other platforms that pay particularly with the brokerage fee, its free model is more akin to that of banks such as the online bank Boursorama.
“We generate money from interest and liquidity of the stocks of the customers, just as a bank earns interest on the cash deposits “ she explains on her website. In other words, with its more than 13 million users, of which a large part are from the clients of the free offer, Robinhood makes money on the interest income. The money these people have on their account and not spent is used by the startup on other projects.
In the same way, the free version of the application offers only one service discount broker, and not broker of full service. The difference is that customers will only be able to buy or sell shares without giving advice or information that is sufficiently specific so that users can take positions at the most opportune time.
Thus, the application is trying to be the “Robin hood” finance remains limited to the users the less confirmed. In its free plan, the opportunity scholarship shall remain very remote for those users who don’t know any better. But of course, with a model that is breaking all the codes, limits would necessarily return to the games. The approach of the$ 10 Million valuation, can we expect the startup to succeed his bet ?
The application of trading Robinhood fails (at the most inopportune moment)