Robinhood’s Co-CEO said that the free stock trading app’s impressive growth leads back to its focus on attracting a younger generation of customers.
At the end of 2019, the company revealed that it had reached more than 10 million accounts, growing its user based tenfold in about three years.
Vladimir Tenev, who launched Robinhood with fellow CEO Baiju Bhatt in 2013, told CNBC that the company aimed to bring “disenfranchised” millennials into investing, adding that the milestone is “a testament to what we’ve been able to do. We’re proud of the fact that we’ve enabled so many younger investors and first-time investors to have access to the markets because we believe that the more people that have access to the markets and can start investing earlier the better off our economy will be.”
Based in Silicon Valley, Robinhood is a commission-free investing platform that allows users to make unlimited trades in shares of over 3,500 US stocks, as well as more than 1,000 global stocks. About half of Robinhood’s customers are first-time investors, with a median age of 30.
The company is currently valued at $7.6 billion after a $323 million Series E funding round in July led by DST Global. The company has raised more than $860 million in venture capital funding to date, and has plans to expand to the U.K. Its success has led Charles Schwab, E-Trade, Interactive Brokers and TD Ameritrade to get rid of transaction fees for their customers in recent months.
Last year, Robinhood also launched a variety of new products, including a cash management feature that gives users a competitive Annual Percentage Yield (APY); fractional shares so that customers can invest as little as $1; and the expansion of its crypto offering so that people can buy and sell seven cryptocurrencies commission-free in 46 states and Washington D.C.
But the company has some steep competition coming up as Charles Schwab is set to acquire TD Ameritrade in an all-stock transaction valued at approximately $26 billion. Together, the firms have more than $5 trillion in client assets and serve more than 24 million clients.