After announcing its IPO, Robinhood must find a CFO before big banks catch up

Stock trading app Robinhood announced plans to IPO as other banks and startups copy its fee-free model.

September 10, 2018

Robinhood, the free stock trading application and crypto exchange, announced plans to go public.

Now, as the $5.6B startup prepares for its public debut, it has some tidying up to do — including hiring a CFO to handle finances and the SEC.

The people love Robinhood

When Robinhood was founded in 2013, skeptics doubted the company could get off the ground without charging fees for stock trades.

Turns out, they were wrong. The user-friendly platform attracted users by the millions, and the 5-year-old company now has 5m users, 2x as many as 36-year-old rival E*Trade (which has 4k employees to Robinhood’s 250).

Long on liquidity, light on leadership

Reassured by Robinhood’s 3 revenue streams — interest earned on customer cash, “order flow” sold to stock exchanges to keep money moving, and “Gold” tier subscriptions priced at $10 to $200 — investors dumped $539m into the startup.

And, although Robinhood was one of the first to drive down the personal finance ‘free’-way, these days it’s bumper-to-bumper. Last month, JPMorgan Chase rolled out a free online stock trading platform, departing sharply from the $24.95 it previously charged per trade.

To maintain its lead, Robinhood added 250 global stocks to its roster earlier this month and is in talks to acquire banking licenses that will ward off big bank competitors.

Robinhood: Stealing from the banks…

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