Robinhood

Robinhood offers US citizens and permanent residents an online platform for commission-free, real-time trading of stocks, ETFs, options, gold, and cryptocurrency, with no minimum account balances or inactivity fees. The platform also allows users to invest in fractional shares and offers custodial crypto services through its Crypto app. Users can invest in over 5,000 US equities and ETFs, as well as over 650 global stocks through American Depositary Receipts (ADRs). Further, its smart order router incentivizes market makers to compete for order flow based on the amount of price improvement obtained. Robinhood launched joint investment accounts in July 2024, that allows users to manage investments together.

The platform’s monetization strategies include rebates from market makers and trading venues on orders placed by users; lending stocks purchased on margin; and a range of smaller revenue streams, including regulatory trading fees and proxy service revenue. Its cash management services generate revenue through interchange fees on transactions made through its debit cards and fees from program banks for sweeping funds into them. Further, Robinhood Gold users pay a monthly fee of USD 5 for trading gold through the service, as well as the annual interest of 2.5% on margin amounts over USD 1,000.

In July 2024, Robinhood acquired Pluto Capital Inc., an AI-powered investment research platform, for an undisclosed sum to enhance Robinhood's platform AI capabilities. The company also acquired London-based Bitstamp, a cryptocurrency exchange, for USD 200 million in June 2024. Through this acquisition, Robinhood planned to leverage Bitstamp’s network of institutional clients across the EU, UK, US, and Asia to expand its crypto offerings globally. In June 2023, Robinhood announced plans to acquire X1 Inc, a platform that offers no-fee credit cards with rewards, for USD 95.0 million cash settlement. Through this acquisition, the company intended to broaden its product offerings by providing a no-fee credit card that includes no annual fees, late fees, or foreign transaction fees. Robinhood planned to acquire Ziglo in April 2022, a London-based cryptocurrency trading platform in the UK. The company will tap into Ziglo’s UK Financial Conduct Authority-approved cryptocurrency, providing UK customers access to 11 cryptocurrencies such as Bitcoin, Ether, and Litecoin. Robinhood acquired investor relations platform Say Technologies in a USD 140 million cash deal in August 2021. Through this acquisition, it planned to introduce new products to improve shareholder access while continuing to provide Say’s proxy voting service and Q&A platform.

In February 2024, Robinhood launched its commission-free trading platform in the UK. The platform allows users to trade US stocks (but not stocks of companies listed elsewhere) without commission or FX fees and offers 5% interest on uninvested cash.

In June 2024, Robinhood agreed to acquire Bitstamp Ltd., a global cryptocurrency exchange, for approximately USD 200 million in cash. This acquisition was expected to accelerate Robinhood Crypto's global expansion, introduce its first institutional business, and enhance its crypto offerings. A month after, the company acquired Pluto Capital Inc., an AI-powered investment research platform that provides customized investment strategies. The acquisition aimed to integrate AI-driven capabilities into Robinhood's platform, with Pluto's founder and CEO, Jacob Sansbury, joining Robinhood to support the integration.

Robinhood reported USD 1.9 billion in total net revenue for FY2023 (up 37% YoY), compared to total net revenue of USD 1.3 billion recorded a year ago. The company reported adjusted EBITDA of USD 536 million for FY2023 (translating to an adjusted EBITDA margin of 27%), compared to an adjusted EBITDA loss of USD 94 million recorded in FY2022 (translating to an adjusted EBITDA margin of -7%). As of August 2024, Robinhood had nearly 24.3 million funded customers and assets under custody close to USD 144 billion.

Key customers and partnerships

Robinhood also offers cash management services, through which it offers a Mastercard debit card in partnership with Sutton Bank. Users also earn 0.30% annual percentage yield (APY) on their uninvested cash through Robinhood’s partnerships with seven program banks, including Goldman Sachs, HSBC, and Wells Fargo. Uninvested cash that is not swept into program banks is deposited into interest-bearing accounts. 

In February 2024, Robinhood partnered with Consensys, to integrate Robinhood Connect with MetaMask, a self-custodial Web3 wallet. Through this collaboration, Robinhood plans to allow users to purchase cryptocurrency through MetaMask's Buy Crypto feature, leveraging Robinhood's low-cost order engine. In September 2022, the company announced a partnership with Polygon, a layer-2 scaling solution based on Ethereum’s blockchain. Through this partnership, Robinhood launched the beta version of its non-custodial crypto wallet for 10,000 users on its waitlist.