November 19, 2020
On the heels of a $660 million Series G funding round last quarter, retail investing platform Robinhood has recently hinted that it might pursue an IPO as early as next year, although co-founder and co-CEO Vlad Tenev told Cheddar that he could not confirm a date.
"While I can't comment specifically on any timelines, I certainly recognize, and everyone at Robinhood recognizes, that it would be an interesting event for customers," he said.
In the meantime, Tenev noted that the company is well-capitalized and plans to continue refining its current offerings as well as develop new tools centered around financial literacy.
The company currently has 13 million approved accounts. Three million of those were funded in the first fourth months of the year, when COVID-related market fluctuations led to a surge in first-time investors flocking to retail platforms.
Robinhood has benefited mightily from this trend. The median age of its users is 31 and 50 percent are new investors.
While the platform has helped reshape retail investing with zero-commission fee trades — a standard other platforms have since adopted — its rise hasn't been without controversy.
Some have raised concerns about inexperienced traders experiencing burnout or mental health issues, though Tenev pushed back on the idea that Robinhood is stoking risky behavior.
"A lot of people equate first-time investors with investors that are more active," he said. "Really the behavior that we're seeing most people engage in with Robinhood is depositing money and buying stock and increasing the amount of stock they buy over time."
He added that the company is nonetheless working to improve the "quality and reliability" of the platform, which includes making it easier for investors to see their buying power in the interface.
That also includes some new bells and whistles such as fractional investing, which allows users to invest as little $1 toward a stock, and recurring investments, which allows users to schedule their activity on a daily, weekly, biweekly, or monthly basis.
Other features in the works include educational content for newer traders. Robinhood's Learn page features in-depth content on stock-picking, markets, and even trading lingo.
That content has seen a 250 percent increase in visits, according to Tenev.
"We're really looking to make it easier for people to develop a long-term investing habit, and we see the bulk of our customers actually investing in that way rather than more active trading," he said.