Robinhood Zero Fee Crypto Trading App Shares IPO Launch Plans
Zero Fee Crypto Trading App Robinhood Plans To Launch IPO
Popular Fintech startup that offers stock, option, and cryptocurrency trades with zero fees — Robinhood is buckling up to go public, starting with the hiring of a chief financial officer.
Just a year and a half ago, Robinhood was yet largely under the radar. But then it raised a $110 million Series C at a $1.3 billion valuation in April 2017 and then just a year later scored a $363 million Series D, both led by DST Global.
Coupled with the growth of its premium subscription for trading on margin called Robinhood Gold, the startup now has the firepower and revenue to make a viable Wall Street debut. It’s now valued at $5.6 billion.
In a news regarding Robinhood, CEO Baiju Bhatt said that the startup has begun to search for a CFO, and is undergoing a spate of audits from the U.S. Security and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) in order to ensure regulatory compliance.
But Robinhood, like many tech startups planning to go public these days, is still losing money. And it’s branching out into areas like stock options and cryptocurrencies that will incur losses as Robinhood pushes for market share. “We don’t intend to make very much money on it at all for the foreseeable future,” Robinhood co-founder Vlad Tenev says.
Investors in IPOs are willing to tolerate losses as long as they will be turned soon enough into growing profits. And they’ve learned to distrust CEOs who talk cavalierly about losing money. Witness the downfall of Groupon after its manic growth failed to deliver profits, or Uber, which has had to retool its expensive global ambitions.
In June, talks emerged that Robinhood was working to launch a cryptocurrency wallet following a job advertisement for multiskilled cryptocurrency engineers posted by the startup. While Robinhood allows traders to buy and sell crypto on the platform, users cannot transfer assets purchased on the platform to a third-party wallet.