The famous virtual currency exchange and trading application, Robinhood, is planning to launch an Initial Public Offering (IPO). The information has been released by Tech Crunch on September 6.
The stock trading app appeared in the radar over a year ago when it announced that it was going to start offering cryptocurrency trading without fees. Additionally, it was able to raise $110 million dollars Series C in April 2017. A year later it gathered $363 million dollars in a Series D funding round. The Russian firm DST Global led both funding rounds.
Now, Robinhood is able to make a viable Wall Street debut by launching its own IPO to the market.
Baiju Bhatt, Robinhood CEO, explained that the company is working on an IPO and it is searching for a chief financial officer to be in charge of it. Furthermore, it is working with regulatory agencies such as the SEC and FINRA in order to be compliant with the current regulations and legislation.
At the moment, the application has 5 million individuals that are buying and selling stocks, ETFs and other assets. As the company raised $539 million dollars, it was able to launch different products to the market faster than its competitors. Some of the investors in the company are Andreessen Horowitz, Kleiner Perkins, Sequoia and Capital G.
The company has a very attractive business model in which it sells order flow to stock exchanges and Robinhood Gold subscriptions to users that want more buying power per month.
However, there are some companies that are starting to challenge Robinhood’s share of the market. For example, the European banking and financial app known as Revolut is also working on a commission-free stock trading app. And the startup Titan launched an application that allows users buy stocks.
Robinhood is also very cautious about pump and dump schemes in the application. It controls the crypto chat rooms with third-party software and humans in order to avoid market manipulation.