Stocks and Crypto Trading Platform Robinhood Looks Towards IPO
The popular fintech startup Robinhood, which offers trading of stocks and cryptocurrencies with zero fees, is reportedly planning to go public.
Robinhood to launch an IPO
Robinhood, which launched the mobile investment, zero-commission cryptocurrency trading service early this year, is now searching for a chief financial officer (CFO) as it prepares to embark on an Initial Public Offering (IPO).
Speaking with TechCrunch on Thursday, September 6, Robinhood CEO Baiju Bhatt revealed that the startup has begun to search for a CFO.
According to Baiju, the search for a CFO comes as the startup undergoes audits from the U.S. Security and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) in order to ensure regulatory compliance.
Baiju Bhatt told TechCrunch that the startup is “actively looking for a CFO right now” as he confirmed going public is “definitely” in the company’s plan in the medium- to long-term. He added that:
“Being a public company I think aligns very closely with our mission as well. And it’s definitely on the horizon, not in the immediate term, but that’s something we are thinking about.”
Bhatt told TechCrunch that he is proud of making cryptocurrency more accessible, although he mentioned that he is not responsible for prices plummeting, which could mean many of Robinhood users have lost money.
Robinhood prepares to venture into the Wall Street
Robinhood only began trading cryptocurrencies this February, and this service has helped the platform sign up more users.
Robinhood has not only helped small investors trade in a market that sometimes seems stacked against them, but it’s also looking like one of the most disruptive financial startups since E*Trade from the 1990’s.
In a valuation carried out in April, 2017, Robinhood raised a $110 million Series C at a $1.3 billion and then just a year later (May 2018) scored a $363 million Series D, both led by Russian-backed firm DST Global.
After announcing the funds raised in May, CEO, Baiju Bhatt said at the time that with the new capital, the firm aimed to “become either the largest or one of the largest crypto platforms out there” by end of 2018.
The blockchain company is currently valued at $5.6 billion, popular for its zero-fee stock trading app and cryptocurrency exchange, about a year and a half ago, the company was still largely unknown.
Robinhood’s current valuation makes the firm the second most valuable fintech startup in the U.S. Currently, there are reportedly 5 million users conducting trades with cryptocurrencies on the Robinhood platform.
Along with traditional stocks, Robinhood currently offers trading options for Bitcoin, Ethereum, Bitcoin Cash, Ethereum Classic, Litecoin, and Dogecoin in 19 states in the U.S.
In addition to the impressive growth of its premium subscription for trading on margin (Robinhood Gold), the startup now has the firepower in its arsenal and revenue to make a viable Wall Street debut.
However, how the expensive business model of Robinhood would be welcomed by IPO investors is yet to be seen.